Vodafone Kenya Limited has secured regulatory approval to increase its control over Safaricom following a restructuring and share acquisition deal involving the Government of Kenya.
In a public announcement published on June 29, the company said the Capital Markets Authority (CMA) had exempted it from making a mandatory takeover offer to other shareholders, clearing a major hurdle for the transaction.
The approval allows Vodafone Kenya to proceed with the proposed acquisition of 6,009,814,200 ordinary shares in Safaricom from the government.
The shares represent 15 percent of the telecom giant’s issued share capital.
The deal forms part of a broader restructuring that will also see changes in ownership within Vodafone Kenya itself, tightening control under the wider Vodacom Group.
Vodafone Tightens Grip on Safaricom
According to the notice, the share purchase will be carried out alongside an internal reorganization of Vodafone Kenya Limited’s shareholding.
Under the plan, Vodacom Group will acquire an additional 12.5 percent stake in Vodafone Kenya from Vodafone International Holdings B.V.
This will raise Vodacom’s ownership of Vodafone Kenya from 87.5 percent to 100 percent.
The two transactions are linked and are expected to streamline ownership and align operations within the Vodafone and Vodacom group structures in Kenya.
Vodafone Kenya said the exemption granted by the CMA applies specifically to these share acquisitions.
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Normally, such a move would require the acquiring firm to make an offer to buy shares from all remaining shareholders.
However, the regulator allowed the company to bypass this step under Regulation 5(1) of the Capital Markets (Take-overs and Mergers) Regulations, 2002.
The firm said the approval was issued after it met all the conditions required by the regulator, although it did not provide further details on those conditions.
While the financial value of the transaction was not disclosed, such a large stake is likely to have a significant impact on control and decision-making within Safaricom.
The CMA decision to waive the mandatory takeover requirement is also significant.
It removes the need for Vodafone Kenya to extend a buyout offer to minority investors, a process that can be lengthy and costly.
Vodafone Kenya said the transaction will proceed once all remaining steps are completed.
The CMA also issued a standard disclaimer stating that while it had approved the announcement, it does not take responsibility for the accuracy of the statements contained in it.
What Happens Next
The deal comes days after the Court of Appeal allowed the government to proceed with the sale despite an ongoing legal challenge, ruling that public interest outweighed the need to halt the transaction.
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Judges said the shares could still be restored if the appeal succeeds and warned that delays were costing the state up to Ksh70 million per day.
The Safaricom stake sale has faced resistance in court, with petitioners arguing that the process lacked transparency and public participation and could violate constitutional provisions.
However, the Court of Appeal lifted earlier orders blocking the sale, allowing the government to proceed with the transaction even as the case proceeds.
The judges held that all parties are within the court’s reach and any harm can be reversed if necessary.
With the regulatory approval now in place, the process moves to the execution phase where the parties complete the share transfer and internal restructuring.
This includes finalizing transaction agreements, settling any financial obligations tied to the sale, and updating shareholding records at Safaricom and Vodafone Kenya.
Once concluded, Vodafone’s influence over Safaricom will increase through both direct shareholding and tighter control of Vodafone Kenya.
It also sets a key precedent for how major stake sales in listed firms can proceed amid legal challenges.
The government’s exit from a 15 percent stake also marks another step in reducing its ownership in commercial enterprises.
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