STC pushes back Vodafone Egypt deal for second time

Saudi Telecom Company, the biggest telecoms operator in the kingdom by market value, pushed back its acquisition of a 55 per cent stake in Vodafone Egypt for the second time and said it needed more time to complete the transaction.

The company confirmed earlier this year that it would buy the stake for $2.4 billion (Dh8.8bn) as part of its regional expansion.

However, “logistical challenges” caused by the coronavirus outbreak have delayed the completion of the deal, STC said.

“The parties need more time to complete the processes related to the transaction, including the due diligence and they have therefore agreed to extend the [agreement] for 60 days starting from today,” the company said in a statement to the Tadawul stock exchange, where its shares trade, yesterday.

The deal allows STC, in which the kingdom’s Public Investment Fund owns a majority stake, to secure a foothold in the Arab world’s most populous country.

Egypt is one of the largest telecoms markets in North Africa, making it appealing to several operators.

Vodafone Egypt is the country’s biggest operator in terms of active subscribers.

State-run Telecom Egypt holds a 45 per cent stake in Vodafone Egypt.

The agreement with STC values the telecoms operator at $4.4bn.

STC unsuccessfully tried to acquire a 45 per cent stake in Telecom Egypt in 2013.

However, analysts said Telecom Egypt was more willing to sell its stake in Vodafone Egypt after launching its own mobile network called “We” in 2017.

Egypt’s Financial Regulatory Authority said in February that STC should make an offer to buy Telecom Egypt’s remaining stake in Vodafone Egypt if its deal with Vodafone goes through.

The regulator cited a 1992 law that would legally bind STC into making an offer on outstanding shares if the deal materialises.

Telecom Egypt later said that it is “closely following the aforementioned potential transaction to consider all of its possible investment options and opportunities”.

However, STC reportedly indicated earlier this month that it would only acquire Vodafone’s stake in the entity and not Telecom Egypt’s.

The parties need more time to complete the processes related to the transaction, including the due diligence SAUDI TELECOM COMPANY FILING TO TADAWUL STOCK EXCHANGE