Kenya’s Plan To Break Up Safaricom Advances Amid USD 2.4 B Deal

The Kenyan government is proceeding with a plan to split telecommunications giant Safaricom into three separate units, even as it finalises a transaction to reduce its stake and cede majority control to South Africa’s Vodacom Group.

Treasury Secretary John Mbadi stated the administration wants to carve East Africa’s biggest company into a mobile-phone tower operator, a financial technology firm, and a telecommunications company, Bloomberg reports. This corporate unbundling is being discussed in parallel with a separate, pending transaction where Vodacom will acquire an additional 20% stake in Safaricom.

The share acquisition will see Vodacom purchase a 15% stake from the Government of Kenya and a 5% stake from Vodafone for a total cash consideration of USD 2.4 B, giving it a 55% controlling share.

The deal includes an advance dividend payment from Vodacom to the Kenyan government of KES 40.2 B (~USD 311 M), which the South African firm expects to recoup through future Safaricom dividend flows within two to three years. Completion of the acquisition is expected in the first quarter of 2026, subject to regulatory approvals.

The push for a split comes as Safaricom demonstrates robust financial performance. The company recently reported a 52.1% jump in group net income to KES 42.8 B (~USD 331 M) for the six months ending September 2025. Its M-PESA mobile money service, a central component of the proposed fintech unit, recorded a 14% year-on-year revenue growth in Kenya during the same period. The government’s assessment has found there would be “a huge benefit” from splitting the company, though a final plan requires cabinet approval.

Analysts and regulators have long discussed separating Safaricom’s operations, particularly the dominant M-PESA platform, which handles more than 90% of Kenya’s mobile money transactions. Proponents argue that a standalone M-PESA would fall under the direct supervision of the Central Bank of Kenya, potentially strengthening financial stability and regulatory oversight. Safaricom’s management has historically resisted a split, with CEO Peter Ndegwa arguing last year that spinning off M-PESA would not enhance shareholder value.

The proposed separation would see the telecom unit focus on voice and data, the tower business manage physical network infrastructure, and M-PESA operate as an independent financial services company. This structural change would represent a significant shift for a company that has become deeply integrated into Kenya’s economy and is also expanding aggressively in Ethiopia, where it recently reached 10 million customers despite continued hostilities.