Safaricom PLC is set to undergo a significant restructuring of its ownership. A recent public announcement confirms a major transaction where Vodafone Kenya Limited will acquire a substantial additional stake from the Government of the Republic of Kenya (GOK).
The move, which solidifies the strategic partnership between the GOK and Vodafone, is detailed in regulatory filings concerning a Proposed Acquisition and Internal Reorganization of Vodafone Kenya Limited.
The highlight of the transaction is the acquisition of an additional 15.0% of Safaricom’s shares by Vodafone Kenya Limited from the GOK.
- Vodafone Kenya is acquiring an additional 6,009,814,200 ordinary shares.
- Valuation: The purchase price has been set at KES 34 per share, valuing the transaction at a total consideration of Ksh. 204.3 billion (approximately US$ $1.6 billion).
Upon completion, this acquisition, combined with existing interests and related share movements, will result in Vodafone Kenya holding a 55.0% shareholding in Safaricom PLC.
The transaction is linked to an internal restructuring within the broader Vodafone/Vodacom corporate family. Vodacom Group Limited will increase its ownership in Vodafone Kenya from 87.5% to a full 100% stake.
This internal reorganization, executed through the purchase of shares from Vodafone International Holdings B.V., effectively results in Vodacom Group acquiring an additional 4.99% indirect stake in Safaricom PLC.
A unique financial component of the deal involves Vodafone compensating the GOK for future dividend rights:
- Dividend Rights Purchase: Vodafone has agreed to purchase the right to receive future Safaricom dividends that would otherwise be due to the GOK.
- Upfront Payment: This agreement is formalized by an upfront payment of Ksh. $40.2$ billion (approximately US$ 309 million) to the Government of Kenya.
Cumulatively, the transaction will see the GOK and Vodafone Kenya hold an aggregate interest of 60% or more in Safaricom PLC. Under the Capital Markets (Take-Overs and Mergers) Regulations, 2022, this threshold typically triggers a requirement for a mandatory take-over offer to be made to all public shareholders.
However, Vodafone Kenya maintains that it does NOT intend to launch a take-over offer of Safaricom. The company will apply to the Capital Markets Authority (CMA) for an exemption from this obligation, citing relevant provisions under the regulations.
The completion of this significant share transfer and corporate reorganization is subject to obtaining necessary approvals from several key Kenyan regulatory bodies, including the Capital Markets Authority (CMA), the Competition Authority of Kenya (CAK), and the Central Bank of Kenya (CBK).