Safaricom sale: 9 Conditions Vodacom must meet to buy out govt stakes in giant ttelco

As news of the government selling its stake in Safaricom continues to raise eyebrows in the country, there are conditions that Vodacom must meet if it buys the state’s share of the telecommunication company.

The Safaricom  15 percent share sale by the Kenyan government involves a regulated process with nine safeguards to protect employees, leadership, brand, foundation, suppliers, and national interests. These stipulations target to ensure that the company remains a Kenyan institution.

Vodacom has to meet the following guardrails if it buys the government’s share in the successful telecommunication company, which has millions of customers across the country and beyond its borders.

1. No employee redundancies are declared by the Company other than in the ordinary course of business;
2. Support the continued existence and operation of each of the Safaricom Foundation and M-Pesa Foundation charitable foundations established by the company
3. Prior to supporting any expansion outside Kenya (excluding any existing operations outside of Kenya), consult with the government in respect of such expansion, prior to such expansion, provided that the government’s consent shall not be required for VKL’s support of any expansion.
4. The Chairman and the Chief Executive Officer of the company shall at all times be citizens of Kenya
5. There are no changes to the executive committee of the company as constituted on the Signature Date without the consent of the Chief Executive Officer
6. There are no changes to the corporate brand of the company, including, without limitation, any change to the “Safaricom” brand, name, trademarks, logos or associated get-up
7. There are no significant changes to local suppliers within the next 3 years following the Signature Date, other than in the ordinary course of business
8. All trustees of the Safaricom Foundation and the M-Pesa Foundation or any future foundations established by the company shall be citizens of Kenya and all funds of such foundations shall be utilised for projects in Kenya
9. No action or decision contemplated in paragraphs (a) to (f) (inclusive) shall be undertaken, implemented, recommended, approved or proposed (whether by the board, any committee of the board, any shareholder of the company, or management) without the prior written consent of the government.

It remains to be seen whether the government will eventually sell its stake to Vodacom, considering concerns from members of the public about selling a stake of a company that has been deeply ingrained in the everyday lives of many through its innovative services such as M-Pesa, Fuliza, and M-Shwari.