Vodacom’s move to buy a portion of Kenya’s 34.9% Safaricom stake could shift control of East Africa’s most influential telecoms and mobile money powerhouse.
As the Kenyan government prepares to cash in on its Safaricom holding to ease budget pressures, the South African-based telco is reportedly positioning itself to swoop on one of Africa’s biggest equity deals that would tighten its grip on M-Pesa and accelerate its regional fintech dominance.
With Vodacom already holding 39.93%, any additional purchase could push it closer to majority control of the $9.1 billion (KSh1.19 trillion) giant, a move that would strengthen its hold on East Africa’s most valuable telco.
According to The Kenyan Wall Street, the East African country is preparing to offload part of its holding to boost revenue as it confronts rising debt-servicing costs and widening budget gaps. A 10% sell-down alone could raise about $920million (KSh119.6 billion), making it one of the region’s most significant equity transactions in years.
While Vodacom, Safaricom and the Kenyan Treasury declined to comment, media reports in Kenya and South Africa have emphasised that the commercial logic is unmistakable. Safaricom remains East Africa’s biggest telecoms and fintech powerhouse, with nearly two-thirds of Kenya’s mobile subscribers and Africa’s most dominant mobile money platform, M-Pesa.
The Nairobi-based Business Daily highlighted that Vodacom taking a larger stake would “strengthen an already deep partnership and consolidate control of the continent’s most successful fintech ecosystem.”
The regional telecoms titan last increased its Safaricom interest through a landmark share-swap deal with Vodafone in 2017. Since then, both companies have pushed aggressively to scale M-Pesa beyond Kenya, expanding into Ethiopia and exploring new regional fintech corridors.
“M-Pesa is no longer just a Kenyan product. It’s the spine of Africa’s mobile money economy. Whoever controls Safaricom controls the rails of East African fintech,” the Kenyan media wrote.
Kenya had earlier floated plans to split Safaricom into three units, telecoms, towers and M-Pesa, in an attempt to raise its valuation before privatisation. Vodacom rejected any separation of M-Pesa, calling the mobile money platform “central to the business model and future growth trajectory.”
Safaricom’s performance has strengthened the case for the sale after posting strong earnings and further entrenching its diversification away from legacy voice. Half-year profit jumped 52.1% to $329million (KSh42.7 billion), driven by 14% M-Pesa growth and narrowing losses in Ethiopia, where its operations are rapidly expanding.
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