Vodacom Shareholders Vote In Favor Of Safaricom Majority Share Acquisition

By Peter Pedroncelli Published: July 19, 2017, 5:14 am
share acquisition - 160232989 Vodacom billboard in Johannesburg. Photo: Nadine Hutton/Bloomberg/GettyVodacom Finalize $2.6B Safaricom Deal. Photo: Nadine Hutton/Bloomberg/Getty

South African telecommunications giant Vodacom’s minority shareholders voted overwhelmingly in favor of plans to acquire a majority share in Kenya’s largest company and major East African telecoms firm, Safaricom.

The shareholders voted at the telecoms company’s annual general meeting, with 99.59 percent voting in support of the resolution, while only 0.40 percent were against the acquisition, according to IOL.

In May Vodacom proposed the purchase of a 34.94 percent indirect stake set to be bought from the Kenyan government.

The stake is worth around $2.76 billion, based on Safaricom’s share price on the Nairobi Securities Exchange, according to Fin24.

The agreement will see Vodacom acquire 87.5 percent of the issued share capital of Vodafone Kenya Limited, and Vodafone will subscribe for new Vodacom Group shares.

Vodacom CEO Shameel Joosub commented on the positive vote in favor of the Safaricom acquisition.

“The vote of confidence from Vodacom’s minority shareholders is an important milestone in our journey to become a leading digital company and empowering a connected society,” Joosub said, according to ITWeb.

“This is an exciting deal that provides Vodacom shareholders with access to a high growth, high margin and high cash generating business in the attractive Kenyan market. The proposed transaction increases our presence in East Africa and makes Vodacom a formidable player in financial services on the continent,” he added.

Majority share in regional market leader

Ownership of Safaricom, Kenya’s market leader, is currently split between the government of Kenya (35 percent), Vodafone Kenya (39.93 percent), public investors (25 percent) and Safaricom employees (0.07 percent).

Once the acquisition is finalised, Vodacom, with 65 percent of its own company owned by Vodafone International, would become a majority stakeholder.

After recent deals in India and the Netherlands for Vodafone International, Vodacom’s Safaricom acquisition provides the England-based firm with a second market-leader within the African region, after Vodacom in South Africa.

The transaction remains subject to certain regulatory approvals and conditions in both Kenya and South Africa.

Accounced in May, Vodacom’s full-year profit rose from last year, thanks in part to strong customer additions as the mobile operator welcomed three million new subscribers in South Africa. Profit for the year ended March 31 rose to around $1 billion, while its revenue rose 1.5 percent to $6.13 billion, according to MarketWatch.

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