Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      MultiChoice: We can’t afford to compete without help

      17 July 2025

      The internet’s weakest link is under the ocean

      17 July 2025

      AI misuse shakes South African courtrooms

      17 July 2025

      Boom gates go hi-tech at South African malls

      17 July 2025

      Megayachts and mansions: the lavish life of 80-year-old Larry Ellison

      17 July 2025
    • World

      Grok 4 arrives with bold claims and fresh controversy

      10 July 2025

      Samsung’s bet on folding phones faces major test

      10 July 2025

      Bitcoin pushes higher into record territory

      10 July 2025

      OpenAI to launch web browser in direct challenge to Google Chrome

      10 July 2025

      Cupertino vs Brussels: Apple challenges Big Tech crackdown

      7 July 2025
    • In-depth

      The 1940s visionary who imagined the Information Age

      14 July 2025

      MultiChoice is working on a wholesale overhaul of DStv

      10 July 2025

      Siemens is battling Big Tech for AI supremacy in factories

      24 June 2025

      The algorithm will sing now: why musicians should be worried about AI

      20 June 2025

      Meta bets $72-billion on AI – and investors love it

      17 June 2025
    • TCS

      TCS+ | Samsung unveils significant new safety feature for Galaxy A-series phones

      16 July 2025

      TCS+ | MVNX on the opportunities in South Africa’s booming MVNO market

      11 July 2025

      TCS | Connecting Saffas – Renier Lombard on The Lekker Network

      7 July 2025

      TechCentral Nexus S0E4: Takealot’s big Post Office jobs plan

      4 July 2025

      TCS | Tech, townships and tenacity: Spar’s plan to win with Spar2U

      3 July 2025
    • Opinion

      A smarter approach to digital transformation in ICT distribution

      15 July 2025

      In defence of equity alternatives for BEE

      30 June 2025

      E-commerce in ICT distribution: enabler or disruptor?

      30 June 2025

      South Africa pioneered drone laws a decade ago – now it must catch up

      17 June 2025

      AI and the future of ICT distribution

      16 June 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CambriLearn
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » News » Vodacom to acquire Safaricom stake for R35bn

    Vodacom to acquire Safaricom stake for R35bn

    By Duncan McLeod15 May 2017
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    Vodacom is buying a 34,9% indirect stake in Kenya’s largest mobile phone operator, Safaricom, from its parent company Vodafone.

    The South African-listed telecommunications group is buying 87,5% of Vodafone Kenya, which is wholly owned by the UK-headquartered Vodafone. Vodafone Kenya holds, as its only material asset, a 39,9% interest in Safaricom.

    As part of the deal, Vodafone will subscribe for new Vodacom shares. Based on Friday’s JSE closing price of R152,49 per Vodacom share, the proposed transaction is worth R34,6bn. This represents a 5,9% discount to the Safaricom share price on the Nairobi Securities Exchange at closing ahead of the announcement.

    Vodafone will retain a 12,5% interest in Vodafone Kenya, equivalent to a 5% interest in Safaricom, after completion of the proposed transaction. It will have the right to nominate one of the four directors appointed by Vodafone Kenya to Safaricom’s board as long as it retains at least 12,5% of the issued share capital of Vodafone Kenya.

    Safaricom, which was founded 20 years ago, is owned by the government of Kenya (35%), Vodafone Kenya (39,9%), public investors (25%) and Safaricom employees (0,07%). The company has a market share of 71%, making it Kenya’s largest mobile operator by far.

    “Safaricom is a high-growth, high-margin and high-cash-generating business,” Vodacom said on Monday. “In its 2017 financial year, Safaricom delivered 8,8% revenue growth, adjusted Ebitda margin of 48,1% and cash flow conversion of 65,9%.” Ebitda is a measure of operating performance.

    “Safaricom has a track record of sustainable growth, having delivered a compound annual growth rate in revenue of 14,8% over the last five years, while its future growth potential is underpinned by a broad range of fundamental drivers,” Vodacom added.

    “The proposed transaction will expose Vodacom Group to the attractive high-growth Kenyan market, being one of the largest and most advanced economies in east and central Africa that has made significant strides in technological innovation.”

    Kenya has a mobile penetration of 88%, which is well below South Africa’s mobile penetration of 146%. It also has an emerging urban middle class with an appetite for high-value goods and services, Vodacom said. “Kenya has high potential for further growth in mobile penetration and data usage is expected to continue to grow, which will increase customer demand for Safaricom’s 3G and 4G mobile, fixed-line and digital services.”

    The deal will give Vodacom closer access to Safaricom’s money platform, M-Pesa, which has more than 19m monthly active customers and which forms an important component of the Kenyan economy.

    Vodacom CEO Shameel Joosub

    “Vodacom Group sees scope to create further value through closer cooperation between both companies, including best practice sharing; replication of Safaricom’s success in M-Pesa in Vodacom Group’s other territories; and the creation of new pan-African enterprise solutions in contiguous markets in East Africa.”

    Vodacom said the proposed deal will also offer an opportunity to diversify its economic exposure and earnings profile in a single transaction. Its interest in Safaricom will contribute about 15% of its earnings (before amortisation for the fair value adjustment of assets on acquisition) based on its 2017 full-year results.

    “We have negotiated what we believe is an attractive price for access to an additional 28,1m customers and one of the most successful and innovative telecoms companies in Africa,” said Vodacom CEO Shameel Joosub in a statement.

    “The transaction will be financially accretive for Vodacom’s shareholders based on the 2017 financial year results, excluding the effects of amortisation on intangibles created on acquisition, and will further enhance our investment case and strategic position.”

    Following completion of the deal, Vodafone’s stake in Vodacom will increase from 65% to 69,6%. This could push Vodacom’s free float below the minimum 20% requirement for its listing on the JSE. Should there be a breach in free float, Vodacom has secured a two-year exemption from the JSE from the date the deal is done. Vodafone has agreed to sell as many as 36,3m Vodacom shares within that two-year period, if required.  — © 2017 NewsCentral Media



    M-Pesa Safaricom Vodacom Vodafone
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleVodacom adds 3m SA customers
    Next Article Global ransomware attack has been blunted

    Related Posts

    Mobile money lifts Africa savings to decade high

    17 July 2025

    South Africa’s telcos battle to monetise 5G as 4G suffices for most

    15 July 2025

    Spam call epidemic: operators say their hands are tied

    10 July 2025
    Company News

    SA businesses embrace gen AI – but strategy and skills are lagging

    17 July 2025

    Ransomware in South Africa: the human factor behind the growing crisis

    16 July 2025

    Mental wellness at scale: how Mac fuels October Health’s mission

    15 July 2025
    Opinion

    A smarter approach to digital transformation in ICT distribution

    15 July 2025

    In defence of equity alternatives for BEE

    30 June 2025

    E-commerce in ICT distribution: enabler or disruptor?

    30 June 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.