Vodacom‘s move to take control of Kenya’s Safaricom has hit a major legal obstacle after the country’s High Court declared the sale of a 15% government stake unconstitutional and ordered the shares returned to the state.
The ruling affects part of a $2.1 billion transaction completed on 30 June that took the South African telecommunications group’s effective stake in Safaricom to 55%.
Vodacom said it was reviewing the judgment and its implications and plans to appeal the decision and apply for a stay while the appeal is heard.
Court finds Safaricom stake sale unconstitutional
A three-judge bench of the High Court’s Constitutional and Human Rights Division found that the sale failed to meet constitutional requirements for public participation.
Justices Francis Gikonyo, Roseline Aburili and Tabitha Wanyama ruled that the sale had been “formulated, undertaken and approved by the cabinet and the National Assembly without any or reasonable meaningful qualitative and quantitative public participation”.
The court went beyond the procedural issue, describing the transaction as “a camouflage merger or acquisition and takeover of Safaricom PLC” rather than the partial divestment it had been presented as.
Some of the evidence before the court also raised concerns that ceding control of a strategic national asset to a foreign company carried national security implications.
What happens to Vodacom’s 55% Safaricom stake?
Vodacom held an effective stake of around 35% in Safaricom before this year’s transactions.
A separate acquisition of an effective 5% stake from Vodafone International Holdings, completed as part of the wider deal, increased that holding to close to 40%.
The acquisition of the Kenyan government’s 15% stake then took Vodacom’s effective interest to 55%, giving it control of Safaricom.
That 15% stake was sold for approximately KSh204.3 billion.
The High Court has now ordered those shares to be restored to the Kenyan government, creating uncertainty over Vodacom’s controlling interest.
Legal challenge began before the deal closed
The legal challenge did not emerge after the transaction was completed.
Petitioners filed their case in March 2026, with conservatory orders preventing the transaction from proceeding for several months.
Kenya’s Court of Appeal lifted those orders on 26 June, clearing the way for the deal to proceed.
The transaction closed four days later on 30 June.
What the ruling means for Vodacom
Safaricom is one of Africa’s largest telecommunications and financial-services businesses and operates the M-Pesa mobile-money platform.
The acquisition was intended to strengthen Vodacom’s position in East Africa and allow the group to consolidate Safaricom’s financial results.
The High Court ruling has now placed a significant part of that transaction in doubt.
Attention will turn to Vodacom’s application for a stay and its planned appeal as it seeks to challenge the order returning the 15% stake to the Kenyan government.
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