Vodacom Group Ltd. agreed to buy a 35 percent shareholding in Safaricom Ltd. from its parent company Vodafone Group Plc, giving the South African wireless operator a foothold in the Kenyan market.
Vodacom, 65 percent owned byVodafone, will pay the equivalent of 34.6 billion rand ($2.6 billion) for the stake, the Johannesburg-based company said in a statement on Monday. Vodafone will retain a 5 percent holding, while the Kenyan government owns 35 percent
The deal sees Newbury, England-based Vodafone reduce its direct exposure to one of its two main African markets, ceding assets to its South African subsidiary.
Safaricom is the market leader in Kenya with a 71 percent mobile-customer market share, and is under pressure from lawmakers and regulators who are debating whether it has a dominant position in the market.
For its part, Vodafone has been reviewing its global asset base, and has completed recent deals in India and the Netherlands.
The company raised three-year targets for service revenue to mid-single digit growth from low-to-mid single digits and earnings before interest and taxes to mid-to-high single digits.
The shares rose 0.2 percent to 152.49 rand on Friday, valuing the company at 227 billion rand ($17 billion).