Saudi Telecom Co. (STC) as part of its expansion bid outside its home market has struck a deal to pay $2.39 billion for Vodafone Group Plc’s Egyptian business.
According to a statement from Saudi Telecom, the monetary offer is for Vodafone’s 55% stake in Vodafone Egypt, the country’s largest mobile operator. The deal will also give the North African firm an enterprise value of $4.35 billion.
With the deal, STC now has access to a customer base of some 100 million people where Vodafone Egypt has a market share of about 44%.
STC still gets more than 90% of revenue from its domestic market. It helps Vodafone further streamline its focus on Europe and sub-Saharan Africa, and cut debt.
Vodafone Egypt shares fell 0.8% at 11:35 in Riyadh, and London-based Vodafone Group dropped 0.2%. State-run Telecom Egypt, which has a 45% stake in Vodafone Egypt, rose 6.2%. STC dropped by 0.2%.
Chief Executive Officer Nasser Sulaiman Al Nasser in a statement said, “The potential acquisition of Vodafone Egypt is in line with our expansion strategy in the MENA region.
“Vodafone Egypt is the leading player in the Egyptian mobile market and we look forward to contributing further to its continuing success.”
Some years back, STC had attempted to take over Telecom Egypt’s holding in the business. Vodafone Group had also expressed interest in buying the stake it didn’t own. Telecom Egypt said in a statement Wednesday that it was considering “all the possible ways it may deal with its investment.”
Vodafone CEO Nick Read said in a statement that Vodafone will utilize the funds from the deal to reduce debt. He said, “The potential sale is also “consistent with our efforts to simplify the group to two differentiated, scaled geographic regions — Europe and sub-Saharan Africa,”
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