Kenya High Court Annuls Safaricom Stake Sale to Vodacom
Nairobi, Kenya – On September 15, 2026, the High Court of Kenya annulled the state’s sale of a 15% stake in Safaricom to Vodacom. The transaction, valued at 204.3 billion Kenyan Shillings (approximately $1.6 billion USD), was deemed invalid by the court, which ordered the immediate return of the shares to the Kenyan government. Both the Kenyan government and Vodacom have announced their intention to appeal the ruling.
Background of the Transaction
The deal was originally finalized on June 30, 2026, following the Court of Appeal’s lifting of an interim injunction that had temporarily blocked its execution. Upon completion, Vodacom’s ownership stake in Safaricom rose to approximately 55%, while the Kenyan state’s holding decreased from 35% to 20%.
Legal Ruling: Constitutional and Legal Violations
The High Court ruled that the sale violated key constitutional and legal provisions, specifically regarding public participation and transparency. Consequently, the court declared the transaction invalid and mandated the restitution of the 15% stake to the state.
Financial Breakdown of the Deal
It is important to distinguish the specific stake sold by the government from the broader components of Vodacom’s acquisition:
- Government Stake Sale: The 204.3 billion KES ($1.6 billion) represents the price paid by Vodacom for the 15% stake acquired directly from the Kenyan government.
- Additional Stake from Vodafone: In parallel, Vodacom acquired an additional effective 5% interest in Safaricom from its parent company, Vodafone, for approximately 68 billion KES.
- Total Operation Value: According to the group, the entire operation represented a total investment of approximately $2.1 billion.
Impact on Public Finances and Infrastructure
The ruling has significant implications for Kenya’s public finances. In its 2026/2027 budget, the Kenyan Treasury had projected that the 204 billion KES expected from the Safaricom sale, combined with proceeds from the privatization of Kenya Pipeline Company, would form the initial capital of the National Infrastructure Fund (NIF).
The NIF is designed to finance large-scale projects in critical sectors, including:
- Roads
- Airports
- Ports
- Electricity
- Information and Communication Technologies (ICT)
- Water and Irrigation
Current Status and Next Steps
The High Court’s decision comes after the transaction had already been executed. The financial and shareholding implications will now depend on the outcome of the appeal process.
- Government Stance: Reuters reports that the Kenyan government intends to contest the judgment.
- Vodacom Stance: Vodacom has also announced its intention to appeal.
At this stage, while the High Court has ordered the return of the 15% stake to the state, the specific mechanisms for reversing the financial aspects of the deal have not yet been established. The case remains open pending the appellate proceedings.
