Court Overturns Vodacom’s Acquisition of 15% Safaricom Stake

Vodacom’s move to increase its control of Safaricom has been thrown into uncertainty after Kenya’s High Court overturned the government’s sale of a 15 per cent stake in the telecommunications giant.

A three-judge bench ruled on September 15, 2026, that the transaction was unconstitutional and unlawful, directing that the shares be restored to the Government of Kenya. The deal had already been completed in June, meaning the ruling now threatens to unwind a transaction worth billions of shillings.

The judges raised concerns about how the transaction was handled, particularly the level of public participation and the disclosure of important information. The court found that the public was not adequately informed about the nature and consequences of the deal, while material details surrounding the transaction were not sufficiently disclosed.

The court also determined that the transaction went beyond an ordinary disposal of government shares. According to the judgment, the purchase effectively gave Vodacom control of Safaricom, making it a merger, acquisition and takeover rather than simply a partial sale of a state holding.

The development is significant because Safaricom is Kenya’s largest telecommunications company and operates M-Pesa, one of the country’s most important mobile-money platforms. Vodacom had increased its effective interest in Safaricom to 55 per cent after acquiring the additional government stake and another 5 per cent interest from Vodafone International Holdings.

The government had sold the 15 per cent holding to Vodacom for approximately KSh204.3 billion, equivalent to about $1.6 billion. A separate arrangement involving rights to future dividends from the government’s remaining 20 per cent stake generated an additional amount of about KSh40 billion.

The transaction was part of the government’s wider plan to raise funds through the disposal of selected state assets. The court ruling therefore creates financial and legal uncertainty over money already received from the transaction and the future ownership structure of Safaricom.

However, the matter is far from settled.

On September 16, Treasury Cabinet Secretary John Mbadi announced that the government would challenge the High Court decision at the Court of Appeal. Vodacom has also indicated that it will appeal and seek a stay of the judgment while the appeal is considered.

For now, Vodacom’s expanded position in Safaricom remains caught up in a legal battle, while the final outcome will depend on the appeal process.