What Exactly Happens in Kenya’s “Direct Negotiated Sale” of Safaricom?

When the government announced on 4 December 2025 that it would sell 15% of Safaricom PLC to Vodacom Group (through Vodafone Kenya Limited) for KSh 204.3 billion, adding KSh 40.2 billion upfront for dividend rights on its remaining 20%, it was clear the state was using the fastest privatisation tool available: a direct negotiated sale.

The mechanism introduced by the Privatisation Act, 2025, allows Kenya to divest from strategic state-linked firms without open tenders.

It has ignited sharp debate: proponents cite speed, fiscal necessity, and Vodacom’s existing 40% stake; critics warn that skipping competitive bidding risks undervaluing the asset.

As of 9 December, Parliament has opened public participation under Sessional Paper No. 3 of 2025, laying bare the exact procedural steps this sale must follow.

Below is a verified timeline of the entire process, drawn strictly from the Act, PFMA references, Treasury filings, and the National Assembly’s official schedule.

Why Direct Negotiation? The Legal Basis

Under Section 74 of the Privatisation Act, 2025, and cross-referenced with Section 87A of the PFMA, the National Treasury may pursue a direct negotiated sale where speed, national interest, strategic shareholding structures, or fiscal stability justify bypassing competitive tenders.

Unlike ordinary privatisations, which require a full multi-year process under the Privatisation Authority, this pathway centralises approval in the Cabinet, with Parliament providing oversight through a Sessional Paper and public participation.

Treasury’s justification:

Vodacom already held a 40% indirect stake;
The state intends to retain strategic influence (20% + board seats);
Kenya faces a KSh 901B fiscal gap and needs non-debt financing;
The new Act permits streamlined processes for state-linked commercial entities.

So What Are the Exact Procedural Steps?

The direct negotiated sale unfolds in three phases: internal setup, public/legislative scrutiny, and execution. These are the legally required steps, not assumptions, not projections.

PHASE 1: Pre-Announcement (October–December 2025)

1. Treasury Proposal (Initiation)

Treasury undertakes internal valuation work, fiscal impact analysis, and buyer fit assessment. It proposes a direct negotiation with Vodacom, citing strategic alignment and speed.

Valuation bases:

6-month VWAP of KSh 27.50
A 23.6% premium applied to reach KSh 34/share
Total shares for sale: 6,009,814,200

Actors: Treasury CS John Mbadi, external advisers, and the Safaricom board were consulted.

2. Cabinet Approval

The cabinet reviews the proposal under Section 74 and approves a negotiated approach. Approval includes policy undertakings, board control safeguards, employment assurances, and commitments on Safaricom Foundation and Kenya-first leadership.

Actors: Cabinet chaired by President William Ruto.

3. Term Sheet Execution

A non-binding term sheet is signed, locking in:

The KSh 34/share price
The KSh 204.3B consideration
The KSh 40.2B dividend-rights payment
The state’s post-sale 20% stake
Vodacom’s request for a CMA takeover exemption

Signed 3 December 2025.

PHASE 2: Post-Announcement Oversight (December 2025–February 2026)

4. Public Disclosure

The government files notice with the NSE, and the Sessional Paper No. 3 of 2025 is tabled before Parliament. The public is informed of the terms, rationale, fiscal impact, and projected timeline.

Announcement made 4 December 2025.

5. Public Participation (Mandatory)

Under Article 118 of the Constitution, committees must collect public input for at least 30 days. Submissions address valuation, fairness, alternatives, impacts on national interest, and process compliance.

Opened 8 December 2025; closes early January 2026.

Actors:

Finance & National Planning Committee (lead)
Public Debt & Privatisation Committee

6. Parliamentary Review & Vote

Committees consider public submissions, then table a report. The National Assembly votes by simple majority to approve or reject the sale. Amendments such as requiring broader Kenyan participation or valuation reassessment may be proposed.

Expected when the House resumes on 18 January 2026.

PHASE 3: Regulatory Clearance & Completion (February–June 2026)

7. Regulatory Approvals

Multiple bodies must sign off or issue exemptions, including:

CMA (takeover exemption; market integrity)
CBK (M-PESA oversight; payment systems)
CA (telecom licensing continuity)
CAK (competition review)
NSE (listing requirements)
COMESA Competition Commission (cross-border merger notification)
Ethiopian Ministry of Trade (due to Safaricom Ethiopia)

Parallel applications begin immediately after parliamentary approval.

8. Share Transfer & Payment

Upon approvals, Vodacom remits:

KSh 204.3B for the shares
KSh 40.2B as upfront dividend rights
Funds go to the Consolidated Fund for infrastructure.

Shares are transferred through a licensed registrar; settlement is T+X as agreed.

9. Post-Close Oversight

The Auditor-General and the Privatisation Commission monitor compliance with:

Board composition undertakings
Job security commitments (three-year moratorium)
Safaricom Foundation funding
The government retained influence through the 20% stake.

Annual reports are expected under PFMA rules.

Phase	Step	Description	Key Details & Timeline	Actors
Pre-Announcement	Treasury Proposal	Valuation, fiscal analysis, justification for direct negotiation	VWAP 27.50 → 34/share; 15% = 6B shares	Treasury CS; advisers
	Cabinet Approval	Approval under Privatization Act Section 74	Includes 9 undertakings	Cabinet
	Term Sheet	Non-binding agreement on price + dividend rights	Signed 3 Dec 2025	Treasury; Vodacom; Safaricom
Post-Announcement	Disclosure	NSE notice + Sessional Paper No. 3	Announced 4 Dec	Treasury
	Public Participation	Constitutionally mandated submissions window	8 Dec – early Jan	Finance & Debt Committees
	Parliamentary Vote	Review & approval/rejection	From 18 Jan 2026	National Assembly
Completion	Regulatory Approvals	CMA, CBK, CA, CAK, NSE, COMESA	Feb–May 2026	Multi-agency
	Share Transfer	Payment + settlement	~KSh 244.5B	Vodacom; Treasury
	Post-Close Monitoring	Compliance & audits	Annual	Auditor-General; Privatization Commission

Where the Process Stands Today (9 December 2025)

The sale is mid-process, not approved. The public participation period is open, and parliamentary committees are receiving memoranda.

Critics, including civil society, opposition MPs, and lawyers, are arguing that the price (KSh 34) is too low and that a direct negotiated sale excludes Kenyan investors who might have bid more.

Parliament’s final vote, expected in January 2026, is the real tipping point.

Safaricom Shares Overview

The Safaricom share price continues to influence investor interest as more Kenyans explore Safaricom shares and learn How to buy Safaricom shares, including asking How much is 100 shares of Safaricom in today’s market?

Ongoing discussions around the Safaricom stake sale privatisation Kenya has revived memories of the historic Safaricom IPO, while the role of Government Safaricom shares remains central to debates on ownership, market stability, and future reforms.

Ronnie Paul is a seasoned writer and analyst with a prolific portfolio of over 1,000 published articles, specialising in fintech, cryptocurrency, climate change, and digital finance at Africa Digest News.