Vodacom Group has confirmed that it remains the registered holder of its 55% stake in Safaricom as Kenya’s Court of Appeal considers a challenge to the $1.6 billion acquisition, keeping the ownership dispute alive even as the enlarged group reports stronger financial services revenue.
In its interim results for the six months ended September 30, released on November 10, Vodacom said the Court of Appeal had ordered the parties to maintain the status quo pending determination of the appeal. The company therefore remains the registered shareholder of the shares acquired from the Kenyan government in June.
The dispute follows a High Court ruling declaring the acquisition of the government’s 15% stake null and void. The court found that the transaction lacked adequate public participation and that material information had not been disclosed. Vodacom and the Kenyan government are appealing the decision.
The transaction increased Vodacom’s ownership in Safaricom from 35% to 55%, making it the controlling shareholder in Kenya’s largest telecommunications operator.
Vodacom Chief Executive Shameel Joosub described the acquisition as a defining milestone in the group’s development.
“The Safaricom transaction further enhances our earnings profile, broadens our exposure to attractive high-growth markets and materially increases the contribution from financial services and digital businesses,” Joosub said in the interim results. vodacom.com+1
The financial results offer a clearer indication of why Safaricom is strategically important to Vodacom.
Group revenue increased 25.6% to R102.5 billion during the six-month period, while financial services revenue rose 99% to R15.9 billion. On a pro forma basis, which assumes Safaricom was part of the group throughout the comparative period, financial services revenue grew 19.2%.
Vodacom also reported 108 million financial services customers, reflecting the growing importance of mobile money, digital payments and financial products to its wider telecommunications business.
Safaricom’s M-Pesa platform is central to that strategy. What began as a mobile money transfer service has developed into a broader financial ecosystem supporting merchant payments, consumer transactions, savings, credit and business services.
For Vodacom, majority ownership provides greater strategic influence over one of Africa’s most established mobile financial services platforms. It also strengthens its position to develop financial products and payment infrastructure across its wider African markets.
The opportunity extends beyond Kenya. Vodacom has been pursuing a strategy to extend M-Pesa’s success into other markets, particularly through lending, merchant services and digital financial products.
Vodacom sees financial services as a major growth engine and wants to extend M-Pesa’s success beyond Kenya and Tanzania.
However, the appeal raises questions about the long-term ownership structure and the extent to which the companies can pursue deeper integration while the dispute remains unresolved.
The immediate legal position is that Vodacom remains the registered shareholder pending the appeal. The court’s eventual determination will establish whether the acquisition of the government’s 15% holding can stand.
For Safaricom, the dispute comes at a time when its mobile money business is increasingly important to its commercial performance and regional expansion strategy.
The government also retains an interest in Safaricom, meaning the outcome will have implications for public ownership, investment policy and the management of one of Kenya’s most strategically important companies.
Vodacom has not indicated that the appeal has interrupted Safaricom’s ordinary operations. The issue is instead the legal certainty surrounding the acquisition and the longer-term governance implications of majority ownership. The most important question is whether the appeal affects major investment decisions involving M-Pesa, technology integration and regional payments.
Vodacom and Safaricom have an opportunity to clarify which strategic projects can proceed under the current ownership arrangement and whether any investment decisions are awaiting the court’s determination.
