South African telco Vodacom Group has struck an agreement to take a majority stake in Kenyan telecoms operator Safaricom.

Vodacom announced today (December 4) it had reached a deal with the Government of Kenya to spend $2.1 billion to acquire a 15 percent stake in Safaricom PLC and an additional five percent from Vodafone.

The deal bolsters Vodacom's focus in East Africa. Safaricom operates in Kenya and Ethiopia.

If the deal is approved and receives regulatory approval, Vodacom will increase its stake in Safaricom from 35 to 55 percent.

The company will remain listed on the Nairobi Stock Exchange.

Vodacom noted that the deal is part of its Vision2030 strategy, which aims to boost the carrier's leadership in some of Africa's high-growth markets.

As part of the agreement, Vodacom added that in accordance with International Financial Reporting Standards (IFRS), Safaricom’s financial results will transition from being accounted for on an associate basis to being fully consolidated, increasing Vodacom Group’s revenue towards R220 billion ($12.8bn).

“This landmark transaction will mark a pivotal step in Vodacom’s journey to accelerate growth and deepens our impact across Africa,” said Shameel Joosub, CEO of Vodacom Group.

“Acquiring a controlling stake in Safaricom strengthens our position as a market leader, while at the same time unlocks new opportunities to drive digital and financial inclusion at scale in Kenya and Ethiopia. Safaricom’s outstanding track record and differentiated growth outlook perfectly complement our Vision 2030 ambitions, empowering us to deliver sustainable value for all stakeholders and to connect millions more people for a better future."

Safaricom was founded in 1997 as a fully owned subsidiary of Telkom Kenya, which then sold a 40 percent stake to UK telco Vodafone three years later. In 2017, Vodafone transferred 35 percent of its stake to South Africa-based Vodacom.

Safaricom has more than 50 million mobile subscribers in Kenya.

The Kenyan government said in May that it planned to sell shares in the telco. At the time, ministers were hoping to raise 149 billion shillings ($1.16bn) in the 2025/26 financial year by selling shares in businesses including Safaricom.

Safaricom also has an Ethiopian unit, which it launched nearly three years ago as Ethiopia's government pushed for more privatization of its telecom networks. The carrier has more than 10 million customers in the country.