South Africa's Vodacom Buys Stake In Safaricom

South Africa's Vodacom said on Monday it will buy a 35 percent stake in Safaricom from its parent company Vodafone for Sh269billion ($2.59 billion), expanding its reach into Kenya.Safaricom, which is 40 percent owned by Britain's Vodafone and 35 percent by Kenya's government, has the largest subscriber base in its home market and dominates the thriving mobile financial services sector through its M-Pesa platform.Calling Safaricom a "prized asset on the African continent," Vodacom now has a significant footprint in Kenya, where Safaricom has an estimated 71% of the mobile market and some 19-million M-Pesa users. M-Pesa is widely seen as the poster child of mobile innovation in Africa and the most innovative mobile money system in the world. An estimated 40% of Kenya's GDP passes through M-Pesa every day.Vodafone, which owns 65% of South Africa-based Vodacom, will still own 5% of Safaricom, in which Kenya's government still owns 35%.As part of the transaction, Vodafone Group has given appropriate assurances to the Government of Kenya to ensure the ongoing success of the long-standing partnership between Safaricom, Vodafone Group and the Government of Kenya.Safaricom CEO Bob Collymore says the arrangement will deepen the mobile telco’s expertise and expand its reach.“The agreement Vodafone Group has reached with the Government of Kenya will ensure Safaricom continues to have strong Kenyan representation at Board and management levels, and promotes the continued successful expansion of the company as well as the opportunity to drive M-PESA to other markets in the continent,” said Collymore.Completion of the transaction is subject to approvals from Vodacom minority shareholders, approval from the Financial Surveillance Department of the South African Reserve Bank and confirmation from the Kenya Capital Markets Authority that the Transaction does not trigger an obligation for Vodacom to make a mandatory bid for Safaricom.