Finance

Vodafone transfers a 35% interest in Safaricom to Vodacom

Vodafone Group announced that its wholly-owned subsidiary, Vodafone International Holdings B.V. (“Vodafone”), has agreed to transfer part of its indirect shareholding in Safaricom Limited (“Safaricom”) to Vodacom Group Limited (“Vodacom”), its sub-Saharan African subsidiary. Based on the agreed terms of the transaction, Vodafone will be exchanging a 35% indirect interest in Safaricom for 226.8 million new ordinary Vodacom shares.  

The transaction, which has a value of €2,361 million based on Vodacom’s closing share price on Friday 12 May 2017, will increase Vodafone’s ownership in Vodacom from 65% to 70%. Vodafone will continue to hold a 5% indirect interest in Safaricom following the transfer, in addition to the indirect interest held through Vodacom.

As part of the transaction, Vodafone Group has given appropriate assurances to the Government of Kenya to ensure the ongoing success of the long standing partnership between Safaricom, the wider Vodafone Group and the Government of Kenya.

The transaction is expected to generate clear benefits for Safaricom, Vodacom and Vodafone Group: Vodafone Group streamlines and simplifies the management of its sub-Saharan African holdings; strengthens alignment and cooperation between Safaricom and Vodacom and provides greater scope to share talent and expertise across the region as well as internationally; and Vodacom gains exposure to the attractive Kenyan market and one of the most successful and innovative telecoms companies in Africa, further enhancing its investment case and strategic position.

Completion of the transaction is subject to a number of conditions, including approvals from Vodacom minority shareholders, approval from the Financial Surveillance Department of the South African Reserve Bank and confirmation from the Kenya Capital Markets Authority that the Transaction does not trigger an obligation for Vodacom to make a mandatory bid for Safaricom.

A committee of Vodacom’s independent non-executive directors has unanimously approved the transaction. Vodacom has appointed an independent expert, Deloitte & Touche to provide a fairness opinion on the proposed transaction which will be included in the circular to be distributed to Vodacom shareholders on or about 5 July 2017 with the general meeting to approve the re-organization expected to take place on or about 15 August 2017. The transaction is expected to close in the third quarter of the 2017 calendar year.