Vodafone to retain a 5% stake in Kenya’s biggest company
Move sees Vodacom of South Africa expand into Kenyan market
Vodacom Group Ltd. agreed to buy a 35 percent shareholding in Safaricom Ltd. from its parent company Vodafone Group Plc, giving the South African wireless operator a foothold in the Kenyan market.
Vodacom, 65 percent owned byVodafone, will pay the equivalent of 34.6 billion rand ($2.6 billion) for the stake, the Johannesburg-based company said in a statement on Monday. Vodafone will retain a 5 percent holding, while the Kenyan government owns 35 percent.
The deal sees Newbury, England-based Vodafone reduce its direct exposure to one of its two main African markets, ceding assets to its South African subsidiary. Safaricom is the market leader in Kenya with a 71 percent mobile-customer market share, and is under pressure from lawmakers and regulators who are debating whether it has a dominant position in the market. For its part, Vodafone has been reviewing its global asset base, and has completed recent deals in India and the Netherlands.
Vodacom also said Monday that full-year earnings per share excluding one-time items increased 4.5 percent to 9.23 rand, broadly in line with estimates. Sales rose 1.5 percent to 81.3 billion rand.
The company raised three-year targets for service revenue to mid-single digit growth from low-to-mid single digits and earnings before interest and taxes to mid-to-high single digits.
The shares rose 0.2 percent to 152.49 rand on Friday, valuing the company at 227 billion rand ($17 billion).