en.Wedoany.com Reported - South Africa's Vodacom's acquisition of a majority stake in Kenya's Safaricom has revealed key terms regarding the appointment rights for the latter's future Chief Executive Officer (CEO). According to a shareholder agreement submitted by Vodafone Group to the U.S. Securities and Exchange Commission (SEC) on May 22, 2026, if Vodacom successfully purchases a 15% stake from the Kenyan government, Vodacom will have the right to determine Safaricom's next CEO. The board must select from a list of candidates provided by Vodafone Kenya Limited (VKL), the holding vehicle through which Vodafone Group controls the Kenyan telecom company.
The agreement also locks in Safaricom's full transformation into a Vodacom subsidiary, meaning its financial reporting, procurement rules, and ethical standards will fully comply with Vodacom's policies. The agreement mentions that VKL has agreed to notify and consult with the Kenyan government before appointing or replacing the Chairman or CEO, and has committed to ensuring the Chairman is a Kenyan national. This allows Kenya to retain a seat at the highest board level, but the core power to select the company's day-to-day operational executives shifts to Johannesburg. Vodacom has also agreed to ensure that the majority of senior management remains Kenyan, a concession aimed at mitigating the political impact of a foreign company taking over East Africa's most profitable firm.
Safaricom is not just a telecom company; it is a pillar of Kenya's economy and the birthplace of the mobile payment platform M-Pesa. Its leadership has long been heavily politicized. In 2019, following the death of former CEO Bob Collymore, Peter Ndegwa was appointed CEO, becoming the first Kenyan to lead the company in nearly two decades. This new agreement will revert Safaricom's leadership structure to the state it was in before 2020, managed by a foreign CEO and a Kenyan Chairman.
The evolution of Safaricom's ownership structure has been a lengthy process. When the company was founded in 2000, Vodafone held a 40% stake and appointed South African-born Michael Joseph as CEO. In 2007, Vodafone transferred most of its shares to South Africa's Vodacom, retaining only a direct 5% stake. Currently, Vodacom plans to purchase an additional 15% stake from the Kenyan government for KES 204.3 billion and take over Vodafone's remaining 5% stake. If the transaction is completed, Vodacom's stake will increase to 55%, making it the majority shareholder. Additionally, Vodacom has agreed to prepay KES 40.2 billion in dividends to the Kenyan government for its remaining 20% stake, with the amount to be deducted from future dividends.
This massive acquisition has received approval from parliament and regional competition regulators but faces legal hurdles. Kenya's High Court suspended the transaction after receiving a petition challenging it, leaving it in a state of limbo. Although a detailed shareholder agreement has been drafted, including provisions regarding Safaricom's future leadership, the transaction process remains stalled pending the court's ruling.
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