Vodacom has entered into an agreement to acquire a 34.94% indirect stake in Safaricom from Vodafone International.
Under the terms of the transaction, it will acquire 87.5% of the issued share capital of Vodafone Kenya Limited, and Vodafone will subscribe for new Vodacom Group shares. A maximum amount of KES393.75 million (R51 million) cash will also be paid.
This values the proposed transaction at R34.6 billion, and represents a 5.9% discount to the Safaricom share price on the Nairobi Securities Exchange.
“The purchase consideration payable by Vodacom Group is the sum of an amount equal to the subscription price payable by Vodafone for 226.8 million new ordinary Vodacom Group shares, which will be set off against the same amount of the purchase consideration,” said Vodacom.
Vodafone Kenya holds a 39.93% interest in Safaricom, and is owned by Vodafone.
Vodafone will retain a 12.5% interest in Vodafone Kenya, equivalent to 4.99% interest in Safaricom, after the transaction.
Safaricom is owned by the government of Kenya (35%), Vodafone Kenya (39.93%), public investors (25%), and Safaricom employees (0.07%).
“The proposed transaction presents a unique opportunity to acquire a significant strategic interest in the premier telecom operator in East Africa,” said Vodacom.
“Following the proposed transaction, Vodacom Group will occupy a leading position in its markets with approximately one third of sub-Saharan Africa’s gross domestic product.”
Vodacom said it expects to conclude the transaction before the end of August.