Safaricom Deal Thrown Into Turmoil as High Court Nullifies 15% Stake Sale
Kenya's High Court has declared the government's sale of a 15 percent stake in Safaricom to Vodacom Group null and void, overturning a transaction worth more than Sh200 billion after finding that the process failed to meet constitutional and legal requirements. A three-judge bench comprising Justices Francis Gikonyo, Roselyne Aburili and Tabitha Ouya ruled that the government had not provided adequate and meaningful public participation and had failed to disclose material information surrounding the transaction.
The transaction, which was completed on June 30, 2026, involved the sale of 6,009,814,200 government-held Safaricom shares to South Africa's Vodacom. The deal was valued at Sh204.3 billion at a price of Sh34 per share, while the wider transaction also involved Sh40.2 billion linked to future dividend rights on the government's remaining stake. Following the sale, Vodacom's effective ownership increased significantly.
The court found that the government had presented the transaction as a partial divestment, while the structure of the deal gave Vodacom effective control of Safaricom. The judges described the transaction as a takeover that had been presented as a partial divestiture and ruled that this distinction, along with other undisclosed information, was important to the constitutional assessment of the sale.
Public participation was one of the central issues in the judgment. Although Parliament conducted hearings and the government argued that consultations had taken place across more than 30 counties, the court found that important transaction documents, including the share purchase agreement and dividend rights agreement, had not been made available to the public. The judges held that public participation must be real, meaningful and purposeful rather than simply a procedural exercise.
The court also found that material information concerning the nature and consequences of the transaction had not been adequately disclosed to the public, Cabinet or Parliament. It said the shortcomings undermined the transparency and integrity required in the management of public assets and rendered the parliamentary approval process constitutionally defective.
National security was another issue considered by the judges. Safaricom operates telecommunications infrastructure and services that are used for mobile money, government functions and election-related systems, while also holding large amounts of personal data. The court questioned whether adequate consideration had been given to the potential national-security implications of transferring effective control of such infrastructure to a foreign-controlled entity.
The judgment also examined the financial aspects of the transaction. The government had defended the Sh34-per-share price, saying it was based on an independent valuation and reflected a market premium. The court nevertheless found problems with the valuation process and questioned whether the transaction met the required standards for the disposal of a public asset. It also raised concerns about the use of future dividend income as part of the financing arrangement.
The ruling orders the 15 percent stake to be restored to the Government of Kenya on behalf of the public and quashes approvals connected to the transaction. The government has indicated that it will challenge the decision, while the High Court declined to immediately suspend its judgment pending an appeal and directed the parties to pursue a substantive application for a stay.
The case follows months of legal challenges surrounding the government's plan to reduce its ownership of Safaricom. Earlier in the year, the High Court had temporarily blocked the transaction, but the Court of Appeal later lifted those orders, allowing the sale to proceed. Vodacom subsequently completed the purchase on June 30 through a block trade on the Nairobi Securities Exchange.
The latest ruling therefore creates another legal and financial complication around one of Kenya's largest state-asset transactions. The outcome of any appeal will determine whether the High Court's orders stand and what happens to the shares transferred to Vodacom. For now, the judgment has placed constitutional compliance, public participation and transparency at the centre of the debate over how strategic public assets should be sold.
