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Johannesburg - The Public Investment Corporation (PIC) has given the Vodacom Group the green light to make the R35 billion acquisition of Safaricom, Kenya’s biggest mobile operator.

The PIC, which manages almost R2 trillion of public servants' pension, and includes the Government Employees Pension Fund, holds a 15.63 percent interest in the Vodacom Group.

“In its letter of support, the PIC has undertaken to vote in favour of the resolutions required to implement the proposed transaction at the general meeting to be convened by Vodacom Group,” Vodacom said on Friday.

Vodacom, which operates in countries including Tanzania, Lesotho and South Africa, said last month that Safricom’s leading mobile money platform, M-Pesa, was an important driver of Kenyan economic growth, and provided essential financial services to more than 19 million customers.

Read also: Vodacom to spend R35bn on stake in Safaricom 

In recent years, mobile network providers have taken steps to expand more into financial services to improve revenue as voice and SMS revenue continued to decline.

The expansion was through money platforms like M-Pesa, a mobile money business, e-wallets and cross border payment options among others.

Increasing growth

Vodacom, which is majority owned by British based Vodafone, said last month that the deal would help boost its presence in the east African market, jointly increasing the company’s growth in financial services customers to 32 million. Its M-Pesa operation was a strong revenue driver for its international operations and it had seen a 15.4percent growth in active customers to 9.2 million, fuelled by expansion in its distribution channel and a growing ecosystem, it said in its 2016 annual report.

M-Pesa contributed 8.9 percent of international revenue, with R13.6bn moved through the system monthly, the company said in its annual report for 2016. However, it shut its M-Pesa service offering in South Africa last year because of slow growth, due to the very high banking penetration, the regulatory environment, and challenges in distribution.

MTN, Africa’s biggest mobile network, also pulled the plug on M-Pesa in South Africa last year citing that it was not viable in the country.

Vodacom shares rose 1.57 percent on the JSE on Friday to close at R166.29.