Kenya: Safaricom Completes Acquisition of M-Pesa Holdings from Vodafone

By InstinctBusiness Oct 20, 20230

Safaricom, the prominent telecom company in Kenya, has successfully concluded the acquisition of M-Pesa Holding Company Limited from its ultimate parent company, Vodafone Group PLC, completing a process that began in April of this year.

The telecommunications company has confirmed its acquisition of 100% ownership of M-Pesa Holding Company, which manages a significant amount of customer deposits in Kenyan shillings. As a result, Safaricom now has complete control, establishing M-Pesa as a wholly-owned subsidiary of the company.

M-Pesa Holding is the corporate trustee responsible for the holding of M-Pesa customer funds under the M-Pesa trust arrangement as required by the National Payment System Regulations.

M-Pesa Holding Company serves as an autonomous trustee for M-Pesa customers, ensuring the impartial management of the trust and the safekeeping of all funds within the mobile money service.

Initially disclosed by Vodafone, this transaction involved Safaricom paying a nominal fee of $1 to the British multinational. It is expected to enhance the cash flows of the publicly-listed Nairobi Security Exchange company. Furthermore, Safaricom stands to generate interest income by investing a portion of the M-Pesa assets in short-term securities.

“The board of directors of Safaricom PLC is pleased to notify the public of the completion of the acquisition by Safaricom of the entire issued share capital of M-Pesa Holding Co. Limited from Vodafone International Holdings,” wrote Safaricom’s acting company secretary Linda Wambani.

“Completion of the transaction was subject to the satisfaction of conditions that are customary for transactions of this nature, including obtaining approval from shareholders and relevant regulators, all of which have been duly satisfied and all regulatory approvals obtained.”

The transfer of M-Pesa Holding to Safaricom signifies the telco’s expanded authority over key aspects of the mobile money service, originally pioneered in Kenya but with its intellectual property previously owned by Vodafone.