Kenya’s key regulators have backed the Government’s decision to sell part of its stake in Safaricom, citing a competitive price, minimal market disruption, and long-term benefits for both investors and the economy.
Appearing before Members of Parliament scrutinising the deal, the Capital Markets Authority (CMA), Competition Authority of Kenya (CAK), and the Communications Authority (CA) said the transaction was sound and aligned with regulatory and policy objectives.
CMA Chief Executive Officer Wycliffe Shamiah said the KSh34 per share price for the 15 per cent stake to be acquired by Vodacom was competitive and could only be achieved through a negotiated block sale rather than an open market transaction. He noted that CMA encourages negotiated shareholder-to-shareholder transactions in deals of this nature, terming the divestiture commercially justified and well structured.
Mr Shamiah added that reducing the Government’s shareholding in non-core commercial enterprises allows the State to redirect resources and managerial focus to priority areas such as infrastructure, health, and education. He also said the sale sends a strong signal of confidence in Safaricom, particularly as Vodafone, which owns 65 per cent of Vodacom is increasing its exposure to the company.
According to CMA, this confidence has already been reflected in the market, with Safaricom’s share price recording a notable surge following the announcement. The regulator said the transaction is likely to attract both local and foreign institutional investors, ultimately enhancing shareholder value, including for minority investors.
Competition Authority Director General David Kemei said CAK’s preliminary assessment indicates that the change will occur strictly at shareholder level and will not alter the existing market structure or reduce competition. He added that the transaction will also be reviewed at the regional level under COMESA regulations, given Safaricom’s cross-border operations.
Communications Authority Director General David Mugonyi said the regulator is processing Safaricom’s request for approval of the proposed change in shareholding, with feedback expected within a week. He noted that there is no legal requirement for a minimum local shareholding threshold and that local equity participation will still be maintained through the Government’s retained stake.
Other regulators, including the Central Bank of Kenya due to its oversight role over M-PESA — are also expected to grant approvals, clearing the way for the transaction to proceed.