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stc signs MoU to acquire Vodafone Egypt for $2.4bn

stc signs MoU to acquire Vodafone Egypt for $2.4bn
The agreement allows due diligence and negotiating the deal terms
STC
7010
-4.11% 39.70 -1.70
Vodafone
VODE
-21.68% 119.09 -33.77

Cairo – Mubasher: The Saudi Telecom Company (stc) announced that it has signed a non-binding memorandum of understanding (MoU) with Vodafone to acquire its 55% stake in Vodafone Egypt for $2.392 billion, equivalent to EGP 37.8 billion (SAR 8.97 billion).

The MoU was signed on Wednesday 29 January 2020 and will be effective for a period of 75 days. Under the agreement, the two parties will complete due diligence and negotiate final terms. The MoU can be further extended with the mutual consent of both parties.

Vodafone expects to close the deal by the end of June 2020.

Moreover, the two companies have agreed to continue the use of the Vodafone brand, as well as preferential roaming arrangements, and access to Vodafone’s central procurement function among other services, Vodafone Group announced.

stc said that the final consideration regarding the deal’s value will be determined upon the signing of a definitive agreement, as per a statement to the Saudi Stock Exchange (Tadawul) on Wednesday.

The agreement’s initial consideration means Vodafone Egypt is valued at around $4.35 billion (SAR 16.31 billion).

It is worth noting that no binding agreement has been signed between stc and Vodafone yet with respect to the potential transaction.

Vodafone is one of four mobile network operators in Egypt, alongside OrangeEtisalat, and Telecom Egypt (WE), while stc currently operates in three markets, Saudi Arabia, Bahrain, and Kuwait.

Vodafone centres in Egypt, namely in Cairo, Giza, and Alexandria, employ around 7,800 people and provide services to Vodafone’s operations around the world.