Kenya’s market regulators have endorsed the planned sale of part of the government’s stake in Safaricom. They term the deal as fairly priced and unlikely to disrupt the market.
The Capital Markets Authority [CMA], the Competition Authority of Kenya [CAK] and the Communications Authority [CA] told lawmakers reviewing the transaction that the divestiture is sound and could benefit minority shareholders.
Under the deal, Vodacom will buy a 15% stake at KES 34 per share through a block sale. CMA chief executive Wycliffe Shamiah said the price was competitive and reflected the best outcome for a transaction of this size. He noted that negotiations between shareholders are appropriate in such cases and that the structure of the deal meets regulatory expectations.
Shamiah added that reducing the government’s exposure to non-core commercial assets allows the state to focus resources on priority areas such as infrastructure, health and education. He said the transaction has already boosted investor confidence, pointing to a rise in Safaricom’s share price following the announcement.
Regulators Clear Path for Government Divestiture in Safaricom
According to the CMA, the deal is likely to attract both local and foreign institutional investors. Regulators see this as a signal of confidence in Safaricom. Given that Vodafone, the majority owner of Vodacom, is increasing its indirect stake in the Kenyan operator.
CAK Director General David Kemei said they will review the transaction at a regional level. Especially because Safaricom operates across several COMESA member states. However, the authority’s preliminary view is that the change will take place at shareholder level and will not alter the existing market structure.
Communications Authority Director General David Mugonyi said Safaricom has formally sought approval for the change in shareholding. It is expected to receive feedback within a week. He noted that there is no legal requirement for a minimum local shareholding. The deal retains government participation and has cabinet approval.
Other regulators, including the Central Bank of Kenya, are also involved due to Safaricom’s role in mobile money through M-PESA.
Vodafone Kenya, which will hold the shares on behalf of Vodacom. Has applied for an exemption from making a full takeover offer to minority shareholders. It has already met disclosure requirements and will also seek approvals in Ethiopia before the transaction is completed.
