In an official announcement to shareholders on October 16, 2026, Vodacom confirmed that its subsidiary, Vodafone Kenya Limited, remains the registered owner of the 15% stake purchased from the Kenyan government in June.
The update follows a September High Court judgment declaring the sale unconstitutional and ordering the shares returned to government ownership.
Kenya’s Court of Appeal considered the matter on October 13 and directed that the existing position regarding the shares and purchase consideration be maintained while the substantive appeal is expedited.
The development allows Vodacom to retain its approximately 55% shareholding in Safaricom pending further court proceedings, although the legality of the transaction remains unresolved.
How Vodacom Acquired a 55% Stake in Safaricom
The ownership dispute stems from a $2.1 billion acquisition announced in December 2025, under which Vodacom agreed to purchase an additional 20% interest in Safaricom.
The transaction involved two separate purchases.
Vodacom acquired a 15% stake from the Kenyan government for approximately $1.6 billion, equivalent to KSh204.3 billion, and an additional effective 5% interest from Vodafone International Holdings for approximately $500 million.
Both transactions were completed on June 30, 2026, increasing Vodacom’s effective ownership from about 35% to 55%.
The Kenyan government retained a 20% shareholding.
As part of the broader arrangement, the government also received approximately KSh40.2 billion upfront in exchange for rights to certain future dividends on its remaining shares.
The acquisition strengthened Vodacom’s position in East Africa and allowed the company to consolidate Safaricom’s financial results into its group accounts.
However, the transaction soon became the subject of a legal dispute over transparency, public participation and the government’s handling of the share sale.
Why the Safaricom Stake Sale Was Declared Unconstitutional
On September 15, Kenya’s High Court ruled that the government’s sale of its 15% Safaricom stake violated constitutional requirements.
According to Kenyan court reporting, the judges found that the government had failed to conduct adequate public participation before completing the transaction.
The court also questioned the disclosure of important information surrounding the sale, including the identity of the buyer and the implications of transferring majority control of Safaricom.
The judgment declared the transaction unconstitutional, invalid and void, ordering the affected shares restored to the Kenyan government.
Vodacom and the government subsequently challenged the decision, arguing for the transaction to remain in place while their appeal is considered.
The dispute reached another stage on October 13.
In its latest shareholder announcement, Vodacom said the Court of Appeal had decided to prioritise the substantive appeal rather than determine the application to suspend the earlier judgment.
Kenyan media separately reported that the court declined to grant a stay of the High Court ruling.
However, the appellate court’s order, reviewed by TechCentral, provides for the existing share registration and purchase consideration to be maintained pending the appeal.
The matter is scheduled to return before the court’s registrar on October 23 for further directions.
Why Vodacom’s Safaricom Stake Matters for M-Pesa
The outcome of the dispute could have significant implications beyond Safaricom’s ownership structure.
Safaricom operates M-Pesa, one of Africa’s largest mobile money platforms, which supports payments, transfers, savings and other financial services for millions of Kenyans.
Mobile money has become a central part of Kenya’s digital economy, with Safaricom holding a dominant position in the country’s payments market.
As Techsoma previously reported, Kenya is also considering new open finance rules that could require established payment providers, including M-Pesa, to share customer financial data with licensed third parties subject to consent.
For Vodacom, majority ownership of Safaricom strengthens its exposure to Kenya’s mobile money industry and Safaricom’s expanding telecommunications business in Ethiopia.
The acquisition is also part of Vodacom’s broader strategy to expand financial services, connectivity and digital infrastructure across Africa.
In its June acquisition announcement, Vodacom said fintech accounted for approximately 44% of Safaricom’s revenue in Kenya, highlighting the importance of financial services to the business.
Losing the disputed 15% stake would reduce Vodacom’s shareholding to approximately 40%, potentially removing its majority control of Safaricom.
The separate 5% stake purchased from Vodafone is not directly affected by the High Court’s order concerning the government’s shares.
What Happens Next?
The fast-tracked appeal leaves Vodacom’s Safaricom investment in a temporary position.
Although the company remains the registered holder of the disputed shares, the Court of Appeal has not overturned the September judgment or delivered a final decision on the legality of the acquisition.
If the appeal succeeds, Vodacom could preserve its controlling position in Safaricom. If the High Court judgment is upheld, the company could be required to relinquish the government’s former 15% stake, raising further questions about how the purchase consideration would be handled.
The case also has broader implications for major investment transactions in Kenya, particularly those involving government-owned assets.
For investors, the dispute raises questions about regulatory certainty, public participation requirements and the legal protections surrounding completed acquisitions.
For Safaricom, the immediate issue is less about its day-to-day telecommunications and mobile money operations than the ownership structure under which its future expansion will be managed.
Vodacom maintains that the acquisition remains strategically important and says it will provide further updates as the appeal progresses.
The next milestone is October 23, when the court is expected to issue further procedural directions.
