South Africa’s biggest mobile operator, Vodacom, said Thursday it had agreed to take control of East Africa’s largest telecoms firm, Safaricom, in a deal worth $2.1 billion.
The deal, which is subject to regulatory approval, would extend Vodacom’s footprint across the continent and comes as Kenya’s cash-strapped government seeks to fill its coffers by offloading state assets.
Kenya’s government had agreed to sell a 15 per cent stake in Safaricom, while a further five percent will come from British Vodafone, Vodacom said in a statement.
If approved, Vodacom’s stake in the Nairobi Stock Exchange-listed company would rise from 35 to 55 percent, it added.
“This landmark transaction will mark a pivotal step in Vodacom’s journey to accelerate growth and deepens our impact across Africa,” said Shameel Joosub, chief executive of Vodacom Group.
“Acquiring a controlling stake in Safaricom strengthens our position as a market leader, while at the same time unlocks new opportunities to drive digital and financial inclusion at scale in Kenya and Ethiopia.”
READ ALSO: Lagos Extends Rail Service Time For ‘The Experience 2025’
Safaricom, one of East Africa’s largest companies, was awarded a licence in 2021 to operate in Ethiopia, becoming the first private telecommunications provider in the tightly controlled nation of more than 110 million people.
The company launched its mobile money service, M-Pesa, in Kenya in 2007, and it has since become an indispensable tool for paying bills and transferring money.
The system is now used by millions of people in seven African countries, according to Safaricom, which estimates that M-Pesa generates more than 40 percent of its profit.
AFP
