South Africa's biggest mobile phone operator, Vodacom, is buying a 35% stake in Kenya's largest mobile firm, Safaricom, for $2.6bn (£2bn).
The deal will extend the South African firm's influence in Kenya.
It will also help increase the use of Safaricom's popular M-Pesa money transfer service across Africa.
M-Pesa, launched 10 years ago in Kenya by Safaricom, lets people without bank accounts use their mobile phones to transfer money.
However the tie-up comes just a year after Vodacom dropped M-Pesa in South Africa after it failed to prove popular with consumers.
That failure was largely attributed to the fact that possessing a conventional bank account is much more common there than in the rest of the continent.
M-Pesa is now available in Albania and Romania, as well as Democratic Republic of Congo, Egypt, Ghana, India, Lesotho, Mozambique and Tanzania.
BBC News.