Vodacom Group has announced that minority shareholders have voted in support of the firm’s proposed acquisition of a 34.9% stake in Kenya’s largest mobile operator by subscribers, Safaricom. In May this year UK-based Vodafone Group agreed to transfer part of its indirect shareholding in Safaricom to Vodacom Group. Vodafone currently holds a 40% indirect interest in Safaricom through a wholly-owned subsidiary, Vodafone Kenya (VKL), but under the terms of the deal, Vodacom agreed to acquire an 87.5% shareholding in VKL, representing a 34.9% indirect interest in Safaricom. In exchange, Vodafone will acquire 226.8 million new ordinary Vodacom shares, increasing its ownership in Vodacom from 65.0% to 69.6%. The UK-based group will retain the remaining 12.5% shareholding in VKL (representing a 5.0% indirect interest in Safaricom) following the transfer, in addition to the indirect interest held through Vodacom.
Completion of the transaction, which has a value of ZAR34.6 billion (USD2.6 billion) and is expected to take place in the third quarter of 2017, remains subject to regulatory approvals and conditions precedent in both Kenya and South Africa. ‘The vote of confidence from Vodacom’s minority shareholders is an important milestone in our journey to become a leading digital company and empowering a connected society,’ commented Vodacom Group Chief Executive Shameel Joosub, adding: ‘This is an exciting deal that provides Vodacom shareholders with access to a high growth, high margin and high cash generating business in the attractive Kenyan market. The proposed transaction increases our presence in East Africa and makes Vodacom a formidable player in financial services on the continent.’