Vodafone has shaken-up its African operations by transferring a €2.4bn (£2.0bn) stake in Kenyan firm Safaricom to Vodacom.
Previously, the FTSE 100 group owned a 40 per cent stake in Safaricom and a 65 per cent shareholding in South African operator Vodacom.
Today's deal means 35 per cent of Safaricom shares are passed to Vodacom, which will issue shares in return to Vodafone. As a result, Vodafone will up its stake in Vodacom to 70 per cent and hang on to a five per cent slice of Safaricom.
Vodafone has issued commitments to the Kenyan government to ensure "the ongoing success" of Safaricom.
The telecoms group said the deal "streamlines and simplifies the management of its sub-Saharan African holdings".
The deal, expected to complete in the third quarter of 2017, is subject to sign-off by the South African central bank and Vodacom's minority shareholders. The South African government owned 14 per cent of Vodacom prior to the today's announcement.
Kenya regulators also must consider whether the transfer triggers an obligation for Vodacom to make a mandatory bid for Safaricom.
Safaricom pioneered mobile phone payments after launching M-Pesa in March 2007. It is seen as one of the most successful payment services of its kind in the world and boasts 26m customers with 140,000 agents using the technology in Kenya.