Safaricom’s Share Sale Explained: The KES 245B Vodacom Deal, 9 Key Conditions, and M-Pesa’s Future

Kenya is in the middle of one of its biggest corporate shake-ups in years – and it centres on Safaricom, the country’s most valuable company and the home of M-Pesa. Here’s what is actually happening, why it’s a big deal for both the government and Vodafone/Vodacom, and how it will change Safaricom’s future.

So, what exactly is being sold?

Until now, Safaricom’s shareholding has been roughly split three ways: about 40% held via Vodafone Kenya (Vodacom/Vodafone), 35% held by the Government of Kenya (GOK), and around 25% by public investors on the Nairobi Securities Exchange.

In December 2025, a three-part transaction was announced:

1. The Kenyan government is selling a 15% stake in Safaricom – 6,009,814,200 shares – to Vodafone Kenya Limited at KES 34 per share, for KES 204.3 billion (about $1.6 billion).
2. Vodacom is buying out Vodafone’s remaining 12.5% stake in Vodafone Kenya, the vehicle that owns Safaricom shares, for KES 68.1 billion (around €0.45 billion).
3. Vodafone Kenya is paying the government KES 40.2 billion upfront for the right to receive future dividends on the State’s remaining 20% Safaricom stake.

Put together, the Kenyan Treasury will receive about KES 244.5–245 billion in cash from Safaricom – KES 204.3 billion from the share sale, plus KES 40.2 billion in “advance dividends”.

After the deal closes, the ownership picture changes to:

• Vodacom (via Vodafone Kenya): 55% of Safaricom
• Government of Kenya: 20%
• Public investors: 25%

In other words, Safaricom moves from joint control to clear majority control by Vodacom, while Kenya deliberately steps back to a strategic minority stake.

Is this a takeover?

Technically, taking control would normally trigger a mandatory takeover offer to all remaining shareholders under Kenya’s Take-overs and Mergers Regulations. Safaricom’s public notice on 4 December 2025 acknowledges that by buying the extra 15%, Vodafone Kenya is deemed to have acquired “effective control” of Safaricom – which would usually force a full offer.

However, the same notice is very clear: “Vodafone Kenya does NOT intend to launch a take-over offer of Safaricom.” The company will instead apply to the Capital Markets Authority (CMA) for an exemption from the mandatory takeover requirement.

So, this is not a buy-out of the whole company. Safaricom stays listed, retail and institutional investors keep their shares, and trading continues on the NSE. What changes is who sits at the top of the shareholder table.

Why is Kenya selling now – and where does the money go?

Kenya is under intense fiscal pressure. Debt service is consuming a large share of government revenues, leaving limited room to borrow more or raise taxes without triggering a backlash.

Finance Minister John Mbadi has framed the Safaricom transaction as part of a new privatisation strategy under the Privatisation Act, 2025. Instead of simply holding on to “prestige” assets, the State wants to unlock cash from mature companies and recycle it into infrastructure and long-term investing.

According to Treasury and multiple briefings:

• The KES 244.5bn from Safaricom will be ring-fenced as seed capital for a National Infrastructure Fund and a Sovereign Wealth Fund, rather than going into day-to-day spending.
• Government hopes to leverage every shilling of seed capital into about ten shillings of private investment, by crowding in pension funds, development financiers and other institutional investors into energy, water, transport and similar projects.

Safaricom is also just the start. Policy papers reference plans to sell up to 65% of Kenya Pipeline Company via IPO by March 2026, aiming to raise roughly KES 100bn, plus further divestitures in other state-owned enterprises.

What protection does Kenya keep?

A big fear locally is that selling down Safaricom means “losing” a strategic national asset – especially one that sits at the heart of the digital economy and financial system.

To counter this, the government says it has negotiated nine key undertakings with Vodacom/Vodafone. In plain language, they are:

1. Jobs protected: Safaricom will not carry out employee redundancies other than in the ordinary course of business – ruling out mass lay-offs tied to this deal.
2. Foundations preserved: Vodacom commits to continued support for the Safaricom Foundation and M-Pesa Foundation, keeping their programmes alive.
3. State consulted on new foreign expansion: Before backing new expansion outside Kenya (beyond existing operations like Ethiopia), Vodacom must consult the Government of Kenya.
4. Kenyan leadership locked in: The chairperson and CEO of Safaricom must always be Kenyan citizens, anchoring control in local leadership.
5. Executive team stability: Vodacom cannot make changes to Safaricom’s executive committee (EXCO) without the CEO’s consent, limiting top-down interference.
6. Brand remains Kenyan: There will be no changes to Safaricom’s corporate brand – name, trademarks, logos and overall brand identity are protected.
7. Local suppliers shielded (for three years): For the first three years after the deal, Vodacom cannot make significant changes to local suppliers, except in the normal course of business.
8. Kenyan-controlled foundations, Kenyan projects: All trustees of the Safaricom and M-Pesa Foundations must be Kenyan, and their funds must be used only for projects in Kenya.
9. Government veto: None of these undertakings can be altered or waived without the prior written consent of the Government of Kenya.

On top of that, the State keeps a 20% equity stake and board representation, giving it a continuing voice on strategy, governance and national-interest issues.

What’s in it for Vodacom and Vodafone?

For Vodacom, this is the logical next step after 2017, when Vodafone moved a 35% Safaricom stake into Vodacom in exchange for shares. Safaricom is a fast-growing telco-plus-fintech platform:

• In the six months to 30 September 2025, service revenue in Kenya grew 9.3% year-on-year, driven by 14% growth in M-Pesa revenue.
• M-Pesa serves tens of millions of customers and processes more than 100 million transactions a day in Kenya alone.

By lifting its stake to 55%, Vodacom can fully consolidate Safaricom into its financial statements, boosting reported revenue, profit and cash flow, and strengthening its story as an African digital and financial-services champion.

Strategically, it also tightens control over:

• M-Pesa – still one of the world’s most influential mobile money ecosystems; and
• Safaricom’s Ethiopian expansion, which is seen as a major future growth engine.

Vodafone Group, which owns 70% of Vodacom, supports the move as part of a shift to focus on markets and assets where it can hold clear control and scale.

How does this change Safaricom going forward?

Day-to-day for customers, nothing changes overnight. Your number stays the same, M-Pesa continues to work, and Safaricom remains listed on the NSE with Kenyan management.

The real shifts are strategic and financial:

• Ownership becomes clearer – one majority shareholder (Vodacom) can take a longer-term, integrated view across Kenya, Ethiopia and other African markets.
• Government steps back from management into an investor-regulator role, while still keeping a sizeable stake and veto powers on key national-interest issues.
• Huge capital is unlocked for infrastructure, via the National Infrastructure Fund and SWF, if the ring-fencing and crowd-in promises are honoured.
• Safaricom’s performance will be watched even more closely as a core pillar of Vodacom and Vodafone’s African growth story.

In short:

Kenya is cashing in part of its Safaricom crown jewel to build a bigger investment engine, and Vodacom is paying a premium to turn a prized partnership into outright control. How well both sides deliver on their promises – from infrastructure pipelines to jobs, innovation and governance – will define whether this becomes a textbook win-win, or a deal that future politicians and investors argue about for years.