Midrand - Vodacom shareholders voted in favour of acquiring a 34.94% indirect stake in Kenya’s Safaricom.
The shareholders voted at an annual general meeting, with the majority of shareholders (99.59%) in favour of the resolution, while only 0.40% against.
The deal will see Vodacom acquire 87.5% of issued share capital of Vodafone Kenya. The cost of Vodacom Group’s acquisition equates to R34.6bn.
The newly acquired stake will position Vodacom Group strategically in the east African market and give it exposure to Kenya’s high growth market. Safaricom is a market leader in Kenya with a market share of 71%.
“Safaricom is a high growth, high margin, and high cash generating business,” the group stated in a circular to shareholders.
Vodacom CEO Shameel Joosub said the deal is transformative. "It gives us access to a high growth, high margin business."
He added that Safaricom is one of the quality asset players in the market, and that the deal would allow Vodacom to work in the financial services space. Outgoing chairperson Peter Moyo described the deal as important.
Mobile penetration in Kenya is only at 88%, indicating room for market expansion, the group stated.
For the year ended March 31 2017, Safaricom reported revenue growth of 14.2% and an Ebitda margin of 48.1%.
The transaction will also allow Vodacom to diversify its financial profile. Its interest in Safaricom will contribute 15% to the group’s earnings.
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