"Obviously it's a big step in terms of commitment from Vodafone to Vodacom. Selling the asset to us does show that the assets are all under Vodacom," Vodacom's chief executive Shameel Joosub said on a conference call with reporters.

Under the deal, valued at 34.6 billion rand ($2.59 billion), Vodacom said it will acquire a 87.5 percent shareholding in Vodafone Kenya, representing a 35 percent indirect interest in Safaricom, in return for issuing 226.8 million new shares to Vodafone, raising the British company's stake from 65 percent currently to 69.6 percent.

Vodacom said buying into Safaricom gives it access to a market where Safaricom has a 71 percent share and demand is still growing for mobile phone services, including Safaricom's M-Pesa payments platform.

Shares in Vodacom were up 0.2 percent at 153 rand at 1043 GMT (6.43 a.m. ET), when Vodafone's shares were down 0.3 percent at 210 pence.

"Safaricom is a high-growth, high-margin and high cash-generating business," Joosub said.

"Vodacom Group sees scope to create further value through closer cooperation between both companies, including replication of Safaricom's success in M-Pesa in Vodacom Group's other territories."

Safaricom, which is 35 percent owned by Kenya's government, said in a statement the deal promoted the continued successful expansion of the company as well as the opportunity to take M-Pesa into other African markets.

"It's highly likely that this is a value accretive deal for Vodacom shareholders," said Momentum S.P. Reid Stockbroker analyst Sibonginkosi Nyanga.

"Everyone knows that Kenya is one of the leading countries when it comes to technology growth so it presents quite a number of opportunities for a company like Vodacom."