VODAFONE SELLS STAKE IN EGYPT UNIT FOR $2.4 BN

CAIRO/DUBAI: Saudi Telecom Co. (STC) agreed to pay $2.39 billion for Vodafone Group Plc’s Egyptian business as part of an expansion outside its home market.

The cash offer is for Vodafone’s 55% stake in Vodafone Egypt, the country’s largest mobile operator, and gives the North African firm an enterprise value of $4.35 billion, according to a statement from Saudi Telecom. Bloomberg reported on Tuesday that the companies were in talks.

The deal gives STC access to a country of over 80 million people where Vodafone Egypt has a market share of about 44%. STC still gets more than 90% of revenue from its domestic market. It helps Vodafone further streamline its focus on Europe and sub-Saharan Africa, and cut debt.

Vodafone Egypt shares fell 0.8% at 11.35am in Riyadh, and Vodafone Group dropped 0.2%. Telecom Egypt, which has a 45% stake in Vodafone Egypt, rose 6.2%. STC dropped 0.2%.

“The potential acquisition of Vodafone Egypt is in line with our expansion strategy in the MENA region,” CEO Nasser Sulaiman Al Nasser said in the statement. “Vodafone Egypt is the leading player in the Egyptian mobile market and we look forward to contributing further to its continuing success.”

More than six years ago, STC had tried to acquire Telecom Egypt’s holding in the business. Vodafone Group had also expressed interest in buying the stake it didn’t own. Telecom Egypt said in a statement Wednesday that it was considering “all the possible ways it may deal with its investment.”

Vodafone said it will use proceeds from the deal to reduce debt. The potential sale is also “consistent with our efforts to simplify the group to two differentiated, scaled geographic regions—Europe and sub-Saharan Africa,” Vodafone CEO Nick Read said.