Vodacom gets stake in Safaricom Kenya
United Kingdom-based telecommunications company Vodafone, on Monday announced that it would be transfering its 35% stake in Kenya's Safaricom to majority-owned South African subsidiary Vodacom.
The move is part of the telecommunication giant's strategy to consolidate two of its African interests and rationalise the company's disparate portfolio of assests around the world.
"Obviously it's a big step in terms of commitment from Vodafone to Vodacom. Selling the asset to us does show that the assets are all under Vodacom," chief executive Shameel Joosub told reporters via a conference call.
The deal, which is valued at R34.6 billion, will give Vodacom a 87.5% share in Vodafone Kenya, which represents a 35% indirect interest in Safaricom. In return, 226.8 million new shares will be issued to Vodafone, raising the UK company's holdings from its current 65% to 69.6%.
The move gives Vodacom access to a market in which Safaricom has a 71% share, with demand for its cellular phone services - and its M-Pesa payments platform - still growing.
"Safaricom is a high-growth, high-margin and high cash-generating business," Joosub told journalists.
"Vodacom Group sees scope to create further value through closer cooperation between both companies, including replication of Safaricom's success in M-Pesa in Vodacom Group's other territories."
The news pushed Vodacom shares up 0.2% on Tuesday morning, where Vodafone's shares were down 0.3%.
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