by David Musyoka
NAIROBI, May 15 (Xinhua) -- African mobile phone operator Vodacom Group said on Monday it had agreed to acquire a strategic stake in Kenya's biggest mobile operator Safaricom from Britain-based Vodafone Group.
Subject to regulatory and shareholder approvals, Vodacom will fund the acquisition of a 34.94-percent stake in Safaricom by issuing 226.8 million new ordinary shares.
Vodacom, 65-percent owned by Vodafone, will pay the equivalent of 2.6 billion U.S. dollars for the stake; Vodafone will retain a 5-percent holding; while the Kenyan government owns 35 percent.
Safaricom CEO Bob Collymore said in a statement that the transaction is set to further enhance its position as a leading African mobile communication company.
"The agreement Vodafone Group has reached with the Government of Kenya will ensure Safaricom continues to have strong Kenyan representation at board and management levels, and promotes the continued successful expansion of the company as well as the opportunity to drive M-PESA to other markets in the continent," Collymore said.
Collymore said 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.
Safaricom's leading mobile money platform, M-Pesa, is an important driver of Kenyan economic growth, providing essential financial services to over 19 million customers.
Vodacom said in a separate statement that the proposed transaction will improve its presence in East Africa, jointly increasing the company's growth in financial services customers to 32 million and making it a formidable player in financial services on the continent.