Kenya's Safaricom and South Africa's Vodacom have agreed to a joint venture worth $13 million.
In which the two mobile phone operators will acquire the intellectual property rights to the financial services platform M-Pesa, from Britain's Vodafone.
The popular mobile money transfer application provides an alternative for those without access to a formal banking network.
Safaricom chief executive Bob Collymore says the deal would be used to expand M-Pesa services to more African markets, and to develop new products.
(SOUNDBITE) (English) SAFARICOM CEO, BOB COLLYMORE, SAYING: "It is about us (Safaricom) determining the future and the roadmap of M-Pesa.
Because at the moment the roadmap is determined by Vodafone, and given that the bulk of the M-Pesa business is in Africa and between Tanzania and Kenya, it is right for us to be determinant." The deal will allow both companies to make significant savings on royalties they currently pay to Vodafone.
It still needs to be approved, but Collymore says it's expected to be completed this year.
(SOUNDBITE) (English) SAFARICOM CEO, BOB COLLYMORE, SAYING: "We have got shareholder approval on this side, it is not a big transaction.
You know for us (Safaricom) it is a six million euros transaction, so it is not about the scale but the related party transaction that requires us to get approval of our board and shareholders and requires them (Vodacom) to not only get approvals of their shareholders but they also require the South African Reserve Bank's approval." The success of M-Pesa has helped build Safaricom into East Africa's most profitable company.
Collymore, who has been in the top job for nine years, says he plans to stay on for an extra year and focus on developing new revenue streams. Vodacom owns 35% of Safaricom, while Vodafone has a 5% stake.