Kenyan regulatory heads have formally endorsed the government’s plan to divest a 15% stake in Safaricom PLC to the Vodacom Group, describing the KSh 34 per share offer as a competitive deal that will unlock significant capital for national development without destabilizing the telecommunications market.
Appearing before a joint parliamentary committee scrutinising the transaction this week, leaders from the Capital Markets Authority (CMA), the Competition Authority of Kenya (CAK), and the Communications Authority (CA) told MPs that the move is a strategic win for both taxpayers and minority shareholders.
Wycliffe Shamiah, Chief Executive Officer of the CMA, defended the pricing of the deal, noting that the KSh 34 per share offer represents a significant premium over the prevailing market price. Recent market data shows Safaricom’s six-month volume-weighted average price (VWAP) stood at approximately KSh 27.50, making the Vodacom offer a roughly 23.6% premium.
“This price could only have been achieved through a block sale,” Mr. Shamiah told the joint committee. “Divestiture of non-core commercial functions allows the Government to concentrate managerial capacity and public expenditure on priority service areas, including infrastructure, health, and education.”
The CMA noted that the transaction has already boosted investor confidence, evidenced by a surge in Safaricom’s share price since the announcement. The regulator views the increased investment by Vodafone (which owns 65% of Vodacom) as a strong global signal of faith in Kenya’s digital economy.
Addressing concerns regarding market dominance and competition, David Kemei, Director General of the CAK, stated that the transaction is unlikely to alter the current competitive landscape.
“It is the Authority’s preliminary view that the divestiture and the associated change in ownership will occur at the shareholder level and are not expected to result in any change to the existing market structure,” said Mr. Kemei.
Because the deal involves companies operating across borders, it will also undergo review by the Common Market for East and Southern Africa (COMESA) competition commission.
Similarly, David Mugonyi, Director General of the Communications Authority, confirmed that Safaricom has already applied for the necessary change in shareholding approvals. He expects a formal response within a week, noting that the deal retains local equity through the government’s remaining 20% stake and has already received Cabinet approval.
The transaction is part of a broader push by the National Treasury to raise KSh 244.5 billion (including an upfront dividend monetisation component). These funds are earmarked for the National Infrastructure Fund and the Sovereign Wealth Fund to support projects in energy, roads, and water.
While the three primary regulators have voiced their support, the deal still requires a final “nod” from the Central Bank of Kenya (CBK) due to Safaricom’s oversight of the M-PESA mobile money platform. Furthermore, Vodafone Kenya Limited has applied to the CMA for an exemption from the requirement to stage a full takeover bid for minority shareholders.
Beyond Kenya’s borders, the transaction remains subject to regulatory approvals in Ethiopia, where Safaricom launched its subsidiary in 2022 and continues to scale its mobile and financial services.
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