Nqobile Dludla | JOHANNESBURG

South Africa’s Vodacom said on Monday it will buy a 35 percent stake in Safaricom from its parent company Vodafone for 34.6 billion rand ($2.59 billion), expanding its reach into Kenya.

Safaricom, which is 40 percent owned by Britain’s Vodafone and 35 percent by Kenya’s government, has the largest subscriber base in its home market and dominates the thriving mobile financial services sector through its M-Pesa platform.

“The proposed transaction will expose Vodacom Group to the attractive high growth Kenyan market, being one of the largest and most advanced economies in east and central Africa that has made significant strides in technological innovation,” Vodacom said in a statement.

Vodafone will retain a 12.5 percent interest in Vodafone Kenya, equivalent to 5 percent interest in Safaricom, after completion of the proposed transaction, the company said.

($1 = 13.3415 rand)

(Reporting by Nqobile Dludla; Editing by Joe Brock)