3minutes read
- Saudi Telecom Company(STC), to acquire Vodafone Egypt’s 55 per cent stake
- State-run Telecom Egypt holds 45 per cent stake.
Saudi Telecom Company(STC), has announced its plan to acquire Vodafone’s 55 percent stake in its Egyptian unit for $2.4 billion.
STC, the biggest telecommunications operator in the kingdom by market value, said in a statement to Saudi Arabia’s Tidal stock exchange. The STC is majority-owned by the kingdom’s Public Investment Fund with a 70 percent stake in the firm. The stock market responded positively to the acquisition with an appreciation of the telco’s share price by 0.9 percent following the agreement. Headquartered in Riyadh, STC’s current market capitalization at $49.1bn makes it the largest telecom company in the region.
In terms of active subscribers, Vodafone Egypt is the country’s largest mobile operator. State-run Telecom Egypt holds a 45 percent stake. The agreement with STC values Vodafone Egypt at $4. 4bn.The “non-binding agreement” with Vodafone will be “effective for a period of 75 days from the date of its signature. The deal can be extended with mutual consent.
Speaking about the agreement, Nasser Al Nasser, chief executive of STC, said that the potential acquisition of Vodafone Egypt was in line with their expansion strategy and to maintain a leadership position and create a regional footprint beyond the kingdom. Mr Nasser, added “Vodafone Egypt is the leading player in the Egyptian mobile market and we look forward to contribute further to its continuous success. “The transaction, is still subject to “detailed due diligence”, and approvals by STC, Vodafone and regulators.
Nick Read, chief executive of Vodafone Group, in a statement, said that the initiative was part of the company’s consistent efforts to “simplify the group to two differentiated, scaled geographic regions – Europe and sub-Saharan Africa” and the deal“ will reduce our net debt and unlock value for our shareholders.”
It may be recalled that in 2013, STC unsuccessfully tried to acquire a 45 percent stake of Telecom Egypt.
