South African companies are betting $413 billion on acquisitions in Kenyan blue-chip companies, seeing them as a platform to gain a bigger foothold in the fast-growing East and Central African market.
Absa Group is the latest group to commit billions of shillings on Kenyan acquisitions over a seven-month period, following in the footsteps of Vodacom Group, buying an additional 20 per cent stake in Safaricom, and the ongoing acquisition of a 66 per cent stake in NCBA Group by Nedbank Group.
Companies have been attracted by the faster pace of economic growth in the East African economy compared to their home market.
As a regional hub, Kenya offers easy access to cross-border trade with countries such as Uganda, Tanzania, Rwanda, South Sudan, Ethiopia and the Democratic Republic of the Congo. It also provides a primary trade corridor linking Africa with the Middle East, India and Asia.
Absa said on Thursday last week it was bidding to increase its stake in its Kenyan subsidiary from 68.5 per cent to 85 per cent in a deal valued at Sh30.9 billion. The lender plans to buy an additional 895.9 million shares in Absa Bank Kenya for Sh34.50 each, taking its final stake to 4.61 billion shares.
In increasing its stake, the South African lender is eyeing a larger share of Absa Kenya's growing dividend payout, in addition to pursuing its broader strategy of deepening its presence in high-potential markets in Africa.
Since the split and rebrand of the Kenyan unit from Barclays Plc in 2020, net earnings have grown from Sh7.4 billion (in 2019) to Sh22.9 billion last year, allowing the unit to increase its annual dividend from Sh6 billion to Sh11.1 billion over the period.
“Absa Group views East Africa as a cornerstone of its pan-African growth ambitions,” the Johannesburg-based multinational said.
“Kenya, Tanzania and Uganda's GDP is expected to grow by at least five percent per year in the coming years, with growth in East African markets expected to continue to outperform due to infrastructure investment.”
This is the playbook that both Vodacom and Nedbank are following in making their new Kenyan investments.
Vodacom is buying a 15 percent stake in Safaricom from the Kenyan government for Sh204.3 billion, and a five percent stake from its British parent Vodafone Group Plc for Sh68.1 billion. The deal was first disclosed in December 2025, the conclusion of which is currently on hold due to a High Court order.
Upon completion of the Sh272.4 billion transaction, Vodacom will increase its stake in Safaricom to 55 per cent from the current 35 per cent. This will give it a larger share of Safaricom's annual dividend, which totals Sh80 billion by March 2026.
The purchase comes as Safaricom deepens its position in the Ethiopian market, where it aims to break even in 2027. The Kenyan telco holds a 54.17 percent stake in Safaricom Ethiopia, while Vodacom has direct ownership of 6.02 percent in the entity.
Meanwhile, Nedbank, Kenya's fifth-largest lender by assets, is spending $110 billion to buy a 66 percent stake in NCBA in a cash-and-stock deal announced in January 2026.
The NCBA will help Nedbank diversify its business, which currently includes operations in six southern African markets. The Kenyan bank is a strong player in the East African market, where its digital credit services reach millions of customers.
Nedbank also cited regulatory certainty as an important consideration for entering the East African market.
Barely two months before the NCBA acquisition was announced, Nedbank had sold its entire 21 percent stake in West Africa-headquartered Ecobank Transnational, citing regulatory uncertainty, the decline of the Nigerian economy and a potential increase in capital requirements.
While leaving West Africa, the bank said it would have a clear focus on the Southern and Eastern Africa regions.
“Kenya's role as a regional financial centre, supported by strong institutions, sophisticated markets and a dynamic technology sector, makes it a natural anchor for Nedbank's East African ambitions,” Nedbank chief executive Jason Quinn said when announcing the transaction in January.
Standard Bank of South Africa – which trades locally as Stanbic Bank – is also said to be in the market for an East African acquisition, having explored the possibility of bidding for NCBA before Nedbank signed off on its offer.
The lender's strategy is to break into the top three in its African markets, but in Kenya it is ranked seventh with an asset base of Sh551.71 billion by March 2026.
The top six lenders by assets are KCB Group (Sh2.25 trillion), Equity Group (Sh2.04 trillion), Co-operative Bank of Kenya (Sh884.57 billion), I&M Group (Sh742.5 billion), NCBA (Sh741.1 billion) and Absa Bank Kenya (Sh569.35 billion).
Between 2018 and 2022, Standard Bank increased its stake in Stanbic Bank's parent firm Stanbic Holdings from 60 percent to 74.92 percent through open market share purchases, underscoring its confidence in the subsidiary's long-term prospects.
Meanwhile, fellow Johannesburg-listed lender FirstRand Bank has long had an interest in establishing a full presence in Kenya since 2012, but has not yet identified a suitable acquisition opportunity.
The bank said last August that Kenya had increased the minimum capital rule for banks to Sh10 billion, opening up a new opportunity for entry into the market through the acquisition of a smaller bank.
FirstRand meanwhile has maintained a representative office in Kenya since November 2011, operated by its corporate and investment arm Rand Merchant Bank.