Vodafone to Consolidate Safaricom, Gaining Control of Key African Telecom

Vodafone Group (LON: VOD) is poised to expand its footprint in Africa by increasing its control over Safaricom, Kenya's leading telecoms operator.

The move, executed through its African subsidiary Vodacom, is expected to close in the first quarter of calendar year 2026, pending regulatory approvals.

Vodacom will acquire an effective 20% stake in Safaricom. Specifically, Vodacom will acquire 15% from the Government of Kenya (GOK) for €1.36 billion (KES 204 billion) and 5% from Vodafone for €0.45 billion (KES 68 billion).

This will bring Vodacom's total stake to 55%, allowing for full consolidation of Safaricom's financials into both Vodacom and Vodafone's accounts.

Following the completion of the acquisition, the ownership structure of Safaricom will be as follows: Vodacom (55%), the Government of Kenya (20%), and public investors (25%) via its listing on the Nairobi Securities Exchange.

Safaricom’s market capitalization currently stands at €7.7 billion, highlighting its significance in the Kenyan market.

The transaction rationale centers on gaining controlling ownership of a highly successful African telecoms and financial services business.

Safaricom boasts a substantial tower and spectrum portfolio in Kenya, along with M-Pesa, a leading fintech platform processing over 100 million daily transactions and serving 38 million customers in Kenya. Safaricom also holds a majority stake in Safaricom Ethiopia.

Headline Numbers:

• Acquisition Cost: €1.81 billion (KES 272 billion) total.
• Vodacom Stake: Increases to 55%.
• Safaricom Market Cap: €7.7 billion.

The acquisition is expected to bolster Vodafone's growth strategy, particularly in the burgeoning African market. Safaricom's recent performance underscores its potential, with service revenue in Kenya increasing by 9.3% in the six months leading up to September 30, 2025, driven by a robust 14% growth in M-Pesa revenue.

The deal provides Vodafone additional flexibility and revenue diversification. With a controlling stake, Vodafone stands to directly benefit from Safaricom's continued growth and profitability in the region, enhancing shareholder value through increased earnings and potential dividend contributions from its African operations.

Driver Breakdown:

• M-Pesa Growth: The fintech platform's continued expansion drives revenue.
• Kenyan Market Dominance: Safaricom's leading position ensures a stable revenue stream.
• Ethiopian Expansion: Safaricom Ethiopia presents a future growth opportunity.

CEO Margherita Della Valle stated, “In line with our focus on growth, this is an opportunity to gain a controlling shareholding in a highly successful African business in an attractive market.”