STC signs $2.39 bln worth MoU to acquire 55% stake in Vodafone Egypt

Saudi Telecom Co. (STC) signed, on Jan. 29, a non-binding memorandum of understanding (MoU) with Vodafone Group to acquire the latter’s 55% stake in Vodafone Egypt.

The telecom provider said in a bourse statement that the contract amounts to $2.39 billion (SAR 8.97 billion), equivalent to a complete enterprise value of Vodafone Egypt for $4.35 billion (SAR 16.31 billion), noting that the final amount will be determined upon signing of definitive agreements.

The statement also noted that the transaction is in line with STC’s growth strategy and is expected to create value for its customers and shareholders.

The MoU will come into effect for a period of 75 days from the date of signature and can be extended with the consent of both parties.

The company also confirmed that there are no related parties to the transaction as well as the name of the financial advisor will be determined later.

Vodafone will work with STC exclusively in relation to the proposed transaction in order to complete due diligence in all aspects and negotiation of the definitive agreements, the statement added.

The agreement will also be subject to obtaining the approvals from STC and Vodafone boards as well as from regulatory authorities, it continued, noting that any material developments will be announced in due course.

According to data compiled by Argaam, the Egyptian cabinet today made an announcement after a visit by Vodafone CEO Nick Read that the company intends to sell its 55% stake in Vodafone Egypt to STC.

Vodafone Group holds a 55% stake in Vodafone Egypt, with the remaining 45% held by Telecom Egypt.