Kenya High Court Declares Vodacom’s 15% Safaricom Stake Deal Invalid

Kenya’s High Court has declared the government’s sale of a 15% stake in Safaricom to Vodacom invalid, ordering the shares to be returned to the state. A three-judge bench delivered the ruling on September 15, finding that the transaction did not meet constitutional and legal requirements around public participation, transparency and public financial management.

Judges also found that important information about the transaction had not been adequately disclosed and that, when combined with Vodacom’s other acquisitions, the deal resulted in effective control of Safaricom.

KSh204.3bn share sale

Announced in December 2025, the transaction involved the Kenyan government selling its 15% Safaricom stake to Vodafone Kenya, a subsidiary within the Vodacom group, for KSh204.3 billion, equivalent to about US$1.6 billion.

An additional KSh40.2 billion was paid upfront for rights linked to future dividends from the 20% stake retained by the government. Together, the two components generated about KSh244.5 billion for the state.

Vodacom completed the transaction on June 30, 2026, after Kenya’s Court of Appeal lifted conservatory orders that had prevented the sale from proceeding. Its effective interest in Safaricom rose to 55%, while the government’s holding fell from 35% to 20%. Vodacom also acquired an effective 5% interest in Safaricom from Vodafone International Holdings as part of the wider transaction.

Court raises concerns over process

A key issue before the High Court was whether the government had provided enough opportunity for meaningful public participation before proceeding with the divestiture.

Judges also questioned the information made available to the public, including details about the buyer and the nature and effect of the transaction.

In the court’s view, the transaction could not simply be treated as a sale of government shares. Considered alongside Vodacom’s other transactions, it amounted to an acquisition that gave the South African group effective control of Safaricom and therefore raised merger, takeover and competition-law requirements.

The court consequently ordered the 15% stake transferred to Vodacom to be restored to the Kenyan government on behalf of the public.

Infrastructure funding at risk

The Safaricom proceeds had been earmarked for Kenya’s proposed National Infrastructure Fund, creating uncertainty around plans to use the money for infrastructure investment.

The KSh40.2 billion advance linked to future dividends formed part of the broader financial arrangement. With the High Court now ordering the reversal of the share transfer, questions remain over how the completed financial transaction will be unwound and whether funds already transferred to the government will have to be repaid.

The specific mechanics and amounts involved will depend on the subsequent legal proceedings.

Vodacom to appeal

Vodacom said it will appeal the High Court judgment and apply for a stay of its enforcement while the appeal is considered.

The company had completed the acquisition on June 30 after the Court of Appeal lifted the earlier conservatory order.

The latest ruling therefore does not necessarily end the dispute. A successful stay could prevent the immediate implementation of the High Court’s order while the Court of Appeal considers Vodacom’s challenge.

Further proceedings could determine whether Vodacom retains the additional 15% interest, how the government’s proceeds from the transaction are handled and what regulatory steps would be required following the High Court’s decision.