Agency launches inquiry onto Vodafone‑Safaricom deal

The East African Community Competition Authority (EACCA) has launched a formal inquiry into the proposed merger between Vodafone Kenya Limited and Safaricom PLC.

The merger is described as what could be one of the most consequential in Kenya’s corporate history.  

The move comes as Vodafone seeks to consolidate its stake in Safaricom, the country’s leading telecommunications and mobile money operator.

The inquiry, announced Thursday, January 22, is part of the Authority’s mandate to determine whether mergers are likely to lessen competition.

"The Authority shall, in accordance with the provisions of the Act and Regulations determine, among other things, whether or not the merger is likely to substantially lessen competition within the community," EACCA said.

Interested partners, including competitors, suppliers and customers, have been invited to submit written representations ahead of the February 16 deadline.

The proposed transaction involves Vodafone Kenya acquiring a 15 per cent shareholding in Safaricom, currently held by the Government of Kenya.

It will also see a restructuring within the Vodafone Group that would increase Vodacom’s effective control of Safaricom to 55 per cent. 

Safaricom, listed on the Nairobi Securities Exchange, would remain publicly traded, with the government retaining 20 per cent and public investors holding 25 per cent.

Vodacom, which operates across several African countries including Tanzania and the Democratic Republic of Congo, has long been a partner in Kenya through its shareholding in Safaricom. 

The proposed deal would strengthen its influence over Safaricom’s extensive network and the M‑Pesa mobile money platform, which serves tens of millions of Kenyans daily.

Under the East African Community Competition (Mergers and Acquisitions) Regulations, the authority will examine whether the merger could reduce competition by limiting market entry for rivals or curbing pricing incentives. 

For the government of Kenya, the sale is part of a strategy to mobilise private capital to support national infrastructure and digital transformation. 

Proceeds from the stake sale could be channeled into development projects, officials said, while maintaining safeguards to protect the interests of Kenyan shareholders.

Safaricom’s management has emphasised that the company will continue operating as a listed entity and no takeover offer for all shares is planned. 

CEO Peter Ndegwa recently said the company remains focused on expanding services, improving connectivity and driving financial inclusion through M‑Pesa. 

"Our commitment to innovation and service excellence remains unchanged,” he said.

Vodafone Group CEO Margherita Valle said the acquisition would allow the group to consolidate control over a business it has partnered with since 2000.

“This step strengthens our ability to support Safaricom’s leadership in the mobile financial services space and build on the success of M‑Pesa,” she said.

The inquiry will also consider the implications for Kenya’s digital economy, particularly mobile money, payments and credit services, where Safaricom holds a dominant position. 

Deputy Registrar for Mergers and Acquisitions Vincent Okoth has been named as the contact for clarifications or submissions on the merger. 

"If you wish to seek further details and/ or clarifications on any aspect of this proposed transaction, you may get in touch with the Deputy Registrar, Mergers and Acquisitions," it said.

All written inputs will be treated confidentially and form part of the EACCA’s assessment before any final decision.

Once the submission window closes, the authority will review evidence and determine whether to approve the merger, impose conditions, or block the deal.