Saudi Telecom Company (STC) is set to buy a majority stake in Vodafone’s Egyptian arm for $2.39bn (£1.84bn) after the two firms signed an initial agreement.
STC, which is mainly owned by Saudi Arabia’s sovereign wealth fund, and Vodafone said they expect to complete the deal by the end of June 2020, should regulators approve.
The Saudi company will gain access to the Vodafone brand, preferential roaming arrangements and Vodafone’s central procurement function, the two firms said in a statement.
UK firm Vodafone will continue to have a presence in Egypt through its shared services centres in Cairo, Giza and Alexandria, which employ around 7,800 people.
Nick Read, chief executive of Vodafone, said: “I am deeply proud of our business in Egypt, being the clear number one leader in the market. Under STC, I believe they will continue to flourish.
“This transaction is consistent with our efforts to simplify the Group to two differentiated, scaled geographic regions – Europe and sub-Saharan Africa. Additionally, it will reduce our net debt and unlock value for our shareholders.”
STC chief executive Nasser al Nasser said: “The potential acquisition of Vodafone Egypt is in line with our expansion strategy in the Middle East and North Africa region.”
“The transaction, which is still subject to a detailed due diligence, confirms stc’s eagerness to maintain a leadership position not only in the Kingdom of Saudi Arabia, but also in the wider region. Vodafone Egypt is the leading player in the Egyptian mobile market and we look forward to contribute further to its continuous success.”