Vodacom, South Africa’s largest mobile operator, is taking control of its biggest East African rival in a deal worth around $2 billion. The Kenyan government, grappling with high public debt, is selling a 15% stake in Safaricom as part of its drive to raise funds by offloading some state assets. Vodacom’s purchase will lift its stake to 55%, effectively giving it control of Kenya’s biggest company by market capitalization which is best known for its M-Pesa mobile money service.
The deal could reshape Africa’s telecoms landscape, deepening Vodacom’s presence in high-growth markets, including Ethiopia, the continent’s second-most populous country, where Safaricom began operating in 2022. Vodacom already operates in other African markets, such as DR Congo and Tanzania.
Proceeds from the sale will be used for infrastructure and sovereign-wealth funds being created by the government, without increasing public debt and requiring tax hikes. Annual debt repayments use up 40% of government revenues. Kenyan Treasury Secretary John Mbadi said the government, which owned 35% of Safaricom, will retain a 20% stake in the company.