Vodacom Group (VOD) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of a 20% stake (15% from government, 5% from Vodafone) for $2.1 billion (KES 34/share), increasing ownership from 35% to 55% and enabling consolidation and control.

• Strengthens diversification and leadership across key African markets, especially Kenya and Ethiopia, leveraging Safaricom’s 65% market share and fintech dominance.

• Aligns with Vision 2030 strategy, supporting digital and financial inclusion and regional expansion.

• Government remains a significant shareholder, supporting a public-private partnership model and unlocking capital for infrastructure investment.

• Safaricom’s differentiated growth outlook is driven by fintech, fiber, and expansion in Ethiopia.

Financial terms and conditions

• Total purchase price is $2.1 billion (KES 34/share), split as $0.5 billion for Vodafone's 5% and $1.6 billion for government's 15%, fully debt funded at favorable rates.

• Upfront payment for future dividend rights from the government totals KES 40.2 billion (valued at R7.4 billion, purchase price R5.3 billion).

• Transaction costs estimated at ZAR 200–300 million, including regulatory and brokerage fees.

• Funding structured through ZAR facilities from Vodafone Luxembourg and a KES facility for the dividend stream.

• FY26 EV/EBITDA multiple for the incremental stake is 6.9x; average cost for 54.9% stake is KES 28/share (5.8x EV/EBITDA).

Synergies and expected cost savings

• Procurement, operational, and digital synergies expected through closer integration and best practice sharing.

• Enhanced collaboration on products, big data, loyalty programs, and financial services.

• Financial services revenue contribution increases from 12.2% to 21.6% for the group.

• Group will have 95 million financial services customers and 49,400 network sites post-transaction.

• Consolidation to unlock operational efficiencies and support sustainable value creation.