The latest developments around the sale of a 15 percent stake in Safaricom have drawn a lot of attention, mainly because of the large fees expected to be paid to the advisers involved. Instead of focusing only on the sale itself, many observers are now looking at how much money investment bankers and lawyers stand to earn from this transaction.
The fees are estimated to reach nearly Sh2.3 billion, showing how advisory work has grown in value as more major deals take place in Kenya’s financial market.
Vodacom executives revealed during a call with analysts that the transaction costs tied to the Safaricom share purchase would fall between 200 million and 300 million rands, which translates to between Sh1.51 billion and Sh2.27 billion. Most of this amount will be used to cover brokerage fees and stamp duty.
The disclosure also confirmed that Stanbic Bank and its investment banking arm SBG Securities are among the advisers guiding the deal.
They are joined by law firms CDH Kenya and CMS Kenya, who have also taken up important roles in the transaction.
What remains uncertain is whether Vodacom or the Kenyan Treasury will carry the burden of paying these huge advisory fees. For both investment banks and legal firms, this type of work is attractive because it offers high returns without requiring large amounts of capital.
The rising number and value of major deals in the country have only increased the earnings of these firms. In fact, the disclosed value of deals this year has risen to about Sh370 billion, compared to just Sh40 billion last year.
These include corporate bond issuances, block share sales, stock market listings and rights issues, all of which have generated significant income for advisers.
Shaun Biljon, Vodacom Group’s financial controller, noted that the transaction costs are considered relatively low for a deal of this size. He explained that the nature of the transaction in Kenya comes with various regulatory fees that must be paid, forming a large part of the total costs.
Vodacom is purchasing six billion Safaricom shares from the government at Sh34 each and is also giving Treasury an advance dividend of Sh40.2 billion.
In return, the company will gain future rights to dividends worth Sh55.7 billion that will come from the government’s remaining 20 percent shareholding.
At the same time, Vodacom is buying an additional five percent stake from its parent company Vodafone Group at the same price. The entire process is expected to close by the first quarter of 2026, subject to regulatory approvals.
Aside from this deal, many other transactions have shaped the market this year. They include Safaricom’s Sh20 billion bond, EABL’s Sh16.78 billion corporate bond, the Sh44.8 billion Linzi Finco infrastructure bond, Family Bank’s Sh8 billion private placement and a Sh2.5 billion rights issue by Sanlam.
There have also been new listings at the Nairobi Securities Exchange, including SKL Group and Satrix MSCI World ETF.
Last year also saw several notable deals, such as Amsons Group’s acquisition of Bamburi Cement, Linzi Finco’s asset-backed bond, HF Group’s rights issue and the sale of a 10 percent stake in I&M Group by British International Investment.
With new rules requiring banks to strengthen their capital base, more rights issues, private placements and mergers are expected soon, which could further increase advisory activity.
These large transactions have brought in billions for market intermediaries, law firms and stockbrokers. The Nairobi bourse has also seen increased commissions from handling share transfers.
In 2023, Diageo spent Sh688 million on transaction fees when buying an additional 14.97 percent stake in EABL, with Stanbic and SBG Securities playing key roles. The Bamburi Cement acquisition by Amsons Group was another major source of income for advisers and stockbrokers, even though the exact fees are still undisclosed.
The growth in deal-making has been reflected in the earnings of stockbrokers and investment banks. In the first half of 2025, they recorded an 82 percent rise in advisory and consultancy fees, reaching Sh284.7 million compared to Sh156.4 million during the same period the previous year.
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