Vodacom’s R36bn bet: Joosub secures control of Safaricom and its M-Pesa jewel
Key topics:
Vodacom secures majority 55% stake in Safaricom for R36bn
Kenyan government sells 15% to raise capital, retains 20%
Safaricom consolidation boosts Vodacom’s fintech and Ethiopia push
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BizNews Reporter
In a decisive move that fundamentally alters the structure of Africa’s most valuable telecommunications partnership, Vodacom Group CEO Shameel Joosub has finally secured majority control of Safaricom for South Africa’s dominant mobile operator.
For investors who have long watched the awkward "joint control" dance between Vodacom, its British parent Vodafone, and the Government of Kenya, today's SENS announcement brings welcome clarity.
Vodacom, whose shares are separately listed on the JSE, is writing a cheque for $2.1 billion (R36.0 billion) to acquire an additional 20% stake in the Kenyan giant, taking its holding to a commanding 55% - what the corporate world terms “majority” as most important decisions in a business require a 50% vote to ensure success.
The Deal Dynamics
The mechanics are clean but expensive. Vodacom is buying a 15% stake directly from the Government of Kenya for $1.6 billion (R27.0 billion) and another 5% from parent company, UK-headquartered multinational Vodafone, for $0.5 billion (R9.0 billion).
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The purchase price of KES34 per share values the transaction at a premium, but for Joosub, the prize is consolidation. Until now, Safaricom was an associate; going forward, its massive cash flows and 62 million customers will be fully consolidated into Vodacom’s books.
Why Kenya is Selling
The timing is political as much as it is financial. The Kenyan Treasury has been under immense pressure. With debt service costs recently consuming over half of tax revenue, President William Ruto’s administration has been desperate to unlock capital without sparking another wave of protests over tax hikes.
The Cabinet Secretary for the Kenyan National Treasury put it plainly in today’s statement, noting the deal allows the state to "unlock capital, without increasing taxes or the country’s debt burden". It is a classic privatisation play: selling the family silver to keep the lights on, though the state shrewdly retains a strategic 20% seat at the table.
The Jewel in the Crown
Vodacom is buying into a beast. Safaricom is not just a mobile operator; it is the operating system of the Kenyan economy. It holds a staggering 65% market share and boasts a Return on Capital Employed (ROCE) exceeding 50%.
The real engine, however, is M-Pesa. With 38 million customers in Kenya alone and over 100 million daily transactions, it remains the world’s premier fintech success story. By consolidating this, Vodacom effectively supercharges its "Vision 2030" pivot from a pure telco to a financial services powerhouse.
The Ethiopian Frontier
The most exciting aspect for those with a higher risk appetite is what Vodacom’s controlling interest will mean for telecoms in Ethiopia, Africa’s second-most populous nation. Safaricom Ethiopia, a greenfields project, has now signed up over 11 million customers, the 10 million milestone having been reached in July 2025.
Bringing the Ethiopian operation under closer control allows Vodacom to deploy its balance sheet more aggressively in a market where the opportunity is obvious, as incumbent Ethio Telecom was a long-time monopoly that is finally facing real competition.
The Bottom Line
The deal will be funded through new debt facilities, which will weigh on the balance sheet in the short term. However, the Board expects to maintain its dividend policy of paying out at least 75% of headline earnings.
For Vodacom shareholders, this looks to be a game-changer. The R36 billion acquisition removes the "holding company discount" often applied to the Safaricom stake, placing the destiny of East Africa’s digital giant firmly in South African hands.
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Closure of the deal is expected in the first quarter of 2026.
As Joosub notes in the SENS release, this consolidates Vodacom’s position as a market leader. But it is still behind fellow SA-headquartered MTN in scale.
MTN Group boasts approximately 291 million subscribers compared to Vodacom Group’s 223 million (with Safaricom)
With the consolidation of Safaricom, revenues are now neck and neck with Vodacom’s annualised number at R210bn vs MTN’s R213bn
MTN’s market capitalisation is R288bn, supported by a 70% surge in the share price for 2025, edging Vodacom’s R272bn, where the stock is up a solid 28% this year.