AfriPulse
A Vodacom logo sits on display outside the Vodacom World mall, operated by Vodacom Group Ltd., in the Midrand district of Johannesburg, South Africa, on Thursday, Feb. 2, 2017. Vodacom, which is 65 percent owned by Newbury, England-based Vodafone and the South African market leader by subscriber numbers, is expanding its internet offering to offset falling voice revenue. Photographer: Waldo Swiegers/Bloomberg via Getty Images
Vodafone Group Plc is tightening its hold on East Africa’s biggest telecommunications market after its South African unit, Vodacom Group Ltd., agreed to buy an additional 20% stake in Safaricom Plc in a transaction worth about €1.81 billion ($1.98 billion).
The deal will raise Vodacom’s ownership in Safaricom to 55%, giving Vodafone and its Johannesburg-listed subsidiary effective control over Kenya’s most valuable company and its fast-growing mobile money platform, M-Pesa.
Vodacom will purchase 15% from the Kenyan government for €1.36 billion and another 5% from Vodafone for €450 million, according to a statement on Monday. Kenya will retain a 20% stake, while public investors will hold 25% through the Nairobi Securities Exchange.
Safaricom, with a market capitalization of €7.7 billion, is the anchor asset in East Africa’s digital economy. Its M-Pesa platform handles more than 100 million transactions daily and serves 38 million customers in Kenya, giving Vodafone deep exposure to one of the world’s most mature mobile money markets. Safaricom also owns a majority stake in Safaricom Ethiopia, one of the continent’s most promising new telecom operations.
“This is an opportunity to gain a controlling shareholding in a highly successful African business in an attractive market,” Vodafone Chief Executive Officer Margherita Della Valle said. She highlighted Safaricom’s role in expanding financial inclusion across the region through M-Pesa.
Safaricom reported 9.3% service-revenue growth in Kenya during the six months to Sept. 30, powered by a 14% jump in M-Pesa revenue, underscoring the platform’s importance as Africa’s mobile payments race intensifies.
The transaction still requires regulatory clearance in Kenya, South Africa a
Source: TechMoran.com | Read the Full Story…
