stc (Saudi Telecom Company) announces it has signed a Memorandum of Understanding1 with Vodafone Group Plc2 (“Vodafone”) in relation to the potential acquisition of Vodafone’s 55% shareholding in Vodafone Egypt by stc.
stc and Vodafone (“the Parties”) have agreed a cash consideration of US$ 2,392m (SAR 8,970m3) for Vodafone’s 55% shareholding in Vodafone Egypt, equivalent to a total Enterprise Value of US$ 4,350m (SAR 16,312m3) for Vodafone Egypt. The final consideration will be determined upon signing of the definitive agreement.
On completion of the transaction, the Parties intend to enter into a Partner Market Agreement, which will include use of the Vodafone brand, and a range of other Vodafone services.
Nasser al Nasser, Chief Executive of stc, said: “The potential acquisition of Vodafone Egypt is in line with our expansion strategy in the MENA region. The transaction, which is still subject to detailed due diligence, confirms stc’s eagerness to maintain a leadership position not only in the KSA, but also in the wider region. Vodafone Egypt is the leading player in the Egyptian mobile market and we look forward to contributing further to its continuing success.”
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. We look forward to continuing our close relationship with the business through a Partner Market agreement, and building on our significant shared service operations in Egypt, known as _VOIS (Vodafone Intelligent Solutions).”
Following the completion of due diligence on Vodafone Egypt by stc, any binding agreement with respect to this transaction will be subject to obtaining the approvals of stc and Vodafone boards as well as any relevant regulatory approvals.
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