Vodafone to sell its stake in Egyptian unit to Saudi Telecom for $2.4 billion
Vodafone Group has struck a preliminary deal to sell its 55 percent stake in its Egyptian unit to Saudi Arabia’s largest telecoms operator, STC, also known as Saudi Telecom, for $2.4 billion, the companies said on January 29.
The non-binding deal values Vodafone Egypt at $4.4 billion and the two companies have agreed an arrangement over the long-term use of the Vodafone brand and other services in Egypt.
Selling the stake is in line with Vodafone’s efforts to streamline its operations to focus on Europe and sub-Saharan Africa, according to Vodafone’s Chief Executive Nick Read.
“It will reduce our net debt and unlock value for our shareholders,” he said.
Vodafone said the transaction was expected to close by June. STC said the non-binding agreement was valid for 75 days from January 29 and could be extended by mutual consent.
“Vodafone Egypt is the leading player in the Egyptian mobile market and we look forward to contributing further to its continuing success,” said STC Chief Executive Nasser Al-Nasser.
The binding agreement is subject to approvals by STC, Vodafone and regulators. STC said no other parties were involved in the potential deal.
STC is majority-owned by the Public Investment Fund (PIF), which is Saudi Arabia’s state fund.
Telecom Egypt, which also owns a stake in Vodafone Egypt, said on January 29 that it was closely monitoring the process “to study all available alternatives for it to handle its investments in Vodafone Egypt.”
The state-owned company said on January 26 that it had no intention of selling its stake.