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Kenya's High Court has nullified the government's sale of a 15 percent stake in Safaricom PLC to Vodacom Group, declaring the KES 204.3 billion ($1.6 billion) transaction unconstitutional and ordering the shares restored to the state. The ruling, delivered on September 15, 2026 by a three-judge bench of the Constitutional and Human Rights Division comprising Justices Francis Gikonyo, Roselyne Aburili and Tabitha Ouya, unwinds a deal that had only closed eleven weeks earlier and that gave Vodacom outright majority control of East Africa's most valuable listed company.
The judgment does not merely question the price or the process on technical grounds. It goes to the core of how Kenya disposes of strategic public assets, finding that the Cabinet and National Assembly pushed through one of the largest divestitures in the country's history without the kind of public participation the Constitution demands, and while withholding material facts about who was actually buying the shares and what that purchase would mean for control of the company.
Both the Kenyan government and Vodacom have said they will appeal to the Court of Appeal and seek a stay of the ruling pending that appeal. Should the appeal fail, the National Treasury faces the prospect of refunding roughly $1.9 billion already banked from the sale, at a moment when it has earmarked much of that money for infrastructure spending.
How the deal came together
The transaction traces back to December 4, 2025, when Vodacom Group announced an agreement with the Government of Kenya to acquire 15 percent of Safaricom for KES 204.3 billion, alongside a separate purchase of Vodafone Group's remaining 12.5 percent stake in Vodafone Kenya Limited, the vehicle that has long held Safaricom shares on behalf of Vodafone and Vodacom. Combined, the moves would lift Vodacom's effective shareholding in Safaricom from about 40 percent to approximately 55 percent, reducing the government's stake from 35 percent to 20 percent and handing Vodacom outright majority control for the first time since Safaricom's founding in 1997.
Safaricom's own notice to shareholders at the time acknowledged that the purchase would give Vodafone Kenya "effective control" of the company, the kind of threshold that would normally trigger a mandatory takeover offer to minority shareholders under Kenya's Take-overs and Mergers Regulations. Vodafone Kenya instead told the market it did not intend to make such an offer and would seek an exemption from the Capital Markets Authority.
Parliament cleared the sale on March 10, 2026, when the National Assembly adopted a joint committee report approving Sessional Paper No. 3 of 2025 and setting out six conditions for the transaction to proceed. The deal still required sign-off from the Cabinet, the CMA, the Communications Authority of Kenya, the Central Bank of Kenya, the COMESA Competition Commission and the East African Community Competition Authority. Litigation began the same month, when petitioners Tony Gachoka and Professor Fredrick Ogola secured conservatory orders halting the sale. The Court of Appeal lifted those orders on June 26, 2026, clearing the way for Vodacom to complete the acquisition on June 30, 2026, and consolidate Safaricom onto its balance sheet under IFRS.
What the court found
The High Court's central finding is that the sale of the government's Safaricom shares was a public policy decision requiring meaningful engagement with citizens under Articles 10 and 201 of the Constitution, and that neither the Cabinet nor Parliament provided it. Judges said the process fell short of the qualitative public participation Kenyan courts have repeatedly demanded in disposals of strategic state assets, treating the transaction more like a routine share sale than what it actually was.
The bench also faulted the government for what it described as "unexplained obscurity" over the buyer's identity, along with concealment and misrepresentation of material facts about the transaction. Kenya Times reported that the court found key documents relevant to the sale had been withheld from both lawmakers and the public during the approval process.
A further and consequential finding concerned the true character of the deal. The judges held that the sale could not be assessed in isolation from Vodacom's parallel purchase of Vodafone's remaining stake in Vodafone Kenya. Viewed together, the two transactions handed a single group 55 percent of Safaricom, which the court characterised as an effective takeover rather than a straightforward disposal of government shares, triggering merger, takeover and competition-law obligations that were not properly discharged. On that basis, the bench quashed the regulatory approvals tied to the sale and ordered the 15 percent stake restored to the Government of Kenya on behalf of the public.
Governance implications for Safaricom
Safaricom confirmed the judgment in a statement under the Capital Markets Act, saying it is reviewing the ruling and its implications while the matter remains before the courts. The practical governance questions are immediate. Since the deal closed in June, Vodacom has operated as Safaricom's majority shareholder, with shareholders having already ratified changes tied to the new ownership structure, including board composition matters. Should the nullification stand, Safaricom's shareholding reverts to roughly 40 percent Vodacom, 35 percent government and 25 percent public float, the balance that prevailed before December 2025, and any board or governance changes premised on Vodacom's 55 percent control would need to be revisited.
For minority shareholders on the Nairobi Securities Exchange, the ruling also revives the takeover-offer question the transaction was structured to avoid. If the transaction did amount to an acquisition of effective control, as the court found when reading the two share purchases together, the exemption Vodafone Kenya sought from a mandatory offer to all shareholders becomes contestable again pending the appeal outcome.
Foreign ownership rules and the wider context
The ruling lands against a backdrop of Kenya's long-running debate over foreign control of strategic sectors. The ICT Policy Guidelines of 2020 raised the minimum local shareholding requirement for ICT licensees from 20 percent to 30 percent, a rule the Ruto administration later moved to delete from national policy after lobbying from foreign investors including Amazon, on the argument that the requirement discouraged large technology firms from setting up in Kenya. Safaricom itself was never squarely subject to that debate in the same way, given that locals already hold a majority of shares once the government's stake is counted alongside the NSE free float, but the episode illustrates how sensitive Kenyan policymakers and courts remain about foreign entities consolidating control of dominant telecom and fintech infrastructure, particularly one that runs M-Pesa, a platform processing more than 100 million transactions a day for roughly 38 million customers.
The High Court's willingness to treat the Safaricom sale as an effective takeover, rather than accept the government's framing of it as a simple divestiture, echoes that broader unease. It signals that regulators and courts will look through the legal structuring of a transaction to its substantive effect on control, a standard that could shape how future foreign acquisitions of Kenyan strategic assets are structured and approved.
What it means for Vodacom's pan-African strategy
For Vodacom, the Safaricom transaction was a cornerstone of its Vision2030 strategy to deepen leadership in Africa's high-growth markets, folding Safaricom's Kenyan and Ethiopian operations fully into group results and lifting Vodacom's revenue base by consolidating one of the continent's largest mobile and fintech businesses. Group chief executive Shameel Joosub had described the completed deal as a landmark moment strengthening Vodacom's position across East Africa.
An unwound transaction, even temporarily pending appeal, complicates that narrative and the accounting treatment Vodacom adopted when it began consolidating Safaricom in July 2026. It also raises the stakes for how Vodacom approaches regulatory and public-participation requirements in future African transactions, particularly in markets where courts have shown a willingness to scrutinise the substance of a deal over its legal form. The Court of Appeal will now decide whether that scrutiny stands, in a case that has already reshaped, however briefly, the ownership of Kenya's most valuable company.
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