Less than three months after it closed, one of Kenya's largest corporate transactions is now in serious legal jeopardy. On Tuesday, September 15, 2026, Kenya's High Court voided Vodacom Group's KES 204.3 billion ($1.58 billion) acquisition of a 15% government stake in Safaricom β the country's biggest telco β declaring the entire process unconstitutional.
The ruling did not just invalidate the deal on a technicality. A three-judge bench found that the government had withheld critical information from the public, the cabinet, and parliament, and had fundamentally misrepresented what the transaction actually was.
The court's language was unambiguous.
"A declaration is hereby made that the partial divestiture of the 15% of the Government of Kenya shares in Safaricom was a camouflage merger or acquisition and takeover of Safaricom PLC and is in contravention of the Constitution and the law," the court ruled.
What was sold to the public as a routine partial divestment was, in the court's view, something far more consequential: a full transfer of control over Kenya's dominant telecommunications company to a foreign corporate group.
How Vodacom Ended Up With 55% of Safaricom
Before the transaction, Vodacom held a 39.9% stake in Safaricom. The deal pushed that figure to 55% β a jump that combined the government's 15% stake and an additional 5% effective interest acquired through Vodafone Kenya. That is not a minor portfolio adjustment; it is a controlling majority in a company that sits at the center of Kenya's digital economy.
The court ordered the 15% stake returned to the government on behalf of Kenyans, a move that could force a complete unwinding of the transaction and complicate the government's broader strategy of raising revenue through state asset sales.
The Public Participation Problem
The judges did not let the process slide. Parliament held hearings across 30 counties, which might sound thorough β but the court found the hearings fell far short of Kenya's constitutional standard for meaningful public participation. The share purchase agreement and the deal covering future dividends were never made public during those sessions.
"In light of our findings above, we hold that there was no reasonable, meaningful and purposive public participation in respect of the divestiture," the court said.
The bench also questioned why the government sold the shares directly to Vodacom rather than running a competitive process to identify a strategic investor β a standard practice in major state asset disposals elsewhere on the continent.
The Price and the Dividend Deal Under Scrutiny
The court rejected the government's justification for the KES 34 ($0.26) per share price, which was based on an independent valuation by KCB Investment Bank that the state described as carrying a market premium. The judges were not convinced.
A separate arrangement also drew criticism: the government had raised an additional KES 40.2 billion ($311 million) by selling the rights to future dividends from its remaining 20% stake in Safaricom. The court found that this effectively traded a long-term income stream from a public asset for a one-time upfront payment β raising concerns about what future governments and ordinary taxpayers stand to lose.
M-PESA, National Security, and Millions of Kenyans' Data
The ruling also went into territory that is become increasingly sensitive across Africa: national security and data sovereignty. Safaricom is not just a telco. It operates M-PESA, the mobile money platform used by tens of millions of Kenyans, supports government payment systems, and provides the infrastructure used for election result transmission. It also holds personal data on a significant portion of Kenya's population.
The court was direct about the risk of ceding that kind of control to a foreign entity. "Even with regulatory safeguards, there is no guarantee that would prevent foreign and external influence or interference with the governance systems, personal security and data" of Kenyans, the bench warned in its ruling.
What Comes Next
The ruling throws Kenya's state asset monetisation programme into uncertainty. The Safaricom stake sale was part of a wider government plan to raise money by disposing of shares in public companies β and it had already closed. Unwinding it now means returning billions in proceeds at a time when fiscal pressure on the Kenyan government remains significant.
For Vodacom Group, the implications stretch beyond Kenya. The South Africa-headquartered company had positioned its growing Safaricom majority as a cornerstone of its East African strategy. This decision, if it stands, reshapes that calculus entirely. Expect appeals β and a prolonged legal battle over one of the most consequential telecoms deals East Africa has seen in years.