Kenya court clears Vodacom’s $1.6 billion Safaricom acquisition

Kenya’s Court of Appeal has overturned a high court order that had blocked the government’s plan to sell a 15% stake in Safaricom, clearing the way for Vodacom to proceed with a $1.6 billion acquisition of East Africa’s largest telecom operator.

A three-judge bench comprising Patrick Kiage, Lydia Achode, and Aggrey Muchelule ruled in favour of the National Treasury on Friday, following an application to unblock the deal. The Treasury had argued that the public interest demanded the sale move forward without further delay.

“Having fully and thoroughly considered this application, we come to the conclusion that it satisfies the two limbs of arguability and nugatory, and that the public interest compelling demands that the stay sought be granted,” the judges said in their ruling. “We accordingly grant it.”

The deal had been stuck since March, when Kenya’s high court ordered a temporary halt pending the hearing of a dispute brought by petitioners opposed to the sale.

They argued that selling a public asset like Safaricom to a foreign entity violated constitutional principles of equity, accountability, and fairness, and that the public was not properly consulted before the deal.

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Why the Safaricom stake sale matters to Kenya

The stake sale is not just a corporate transaction; it is central to how President William Ruto’s government plans to fund a significant chunk of public spending.

With limited room to borrow more or raise taxes further, Kenya has turned to selling stakes in state-owned assets, including Safaricom and Kenya Pipeline Company, to finance infrastructure projects under Ruto’s $39 billion development plan, which covers railways, airports, roads, power lines, dams, and irrigation.

The sale is expected to raise approximately 204.3 billion shillings (about $1.6 billion), with an additional 40.2 billion shillings paid upfront in exchange for dividends the government would have otherwise received from its stake. Treasury Secretary John Mbadi had warned in court filings that prolonged delay risked the buyer reconsidering, re-pricing, or abandoning the deal entirely, a risk now removed by the court’s decision.

Under the deal, Vodacom, South Africa’s biggest mobile operator, will raise its stake in Safaricom from 40% to 55%, reducing the Kenyan government’s share to 20%. It will also buy Vodafone International Holdings’ remaining 12.5% stake in Vodafone Kenya, becoming its sole owner.

Vodacom does not intend to acquire the remaining Safaricom shares and is seeking a regulatory exemption from Kenya’s Capital Markets Authority to avoid that obligation.

With the court’s stay lifted, the deal can now proceed, pending final regulatory approvals from Kenyan authorities.