Vodafone Group, a British multinational telecommunications company, and the Saudi Arabia-based telecommunications provider Saudi Telecom Company (STC) are continuing discussion over a 55% stake sale of Vodafone shares in its Egyptian business, despite the expiry of the initial offer deadline last week.
The two parties agreed in separate statements on a “misalignment” on Vodafone’s side in preparation for a $2.4 billion transaction of its Egyptian stake. STC said that the non-binding memorandum of understanding (MoU) to acquire the stake had ended without an agreement, but negotiations with Vodafone would continue. Furthermore, the British telecom company commented: “Vodafone now looks to STC and Telecom Egypt to find a suitable agreement to enable the transaction to close.”
The MoU was announced in January of this year when STC offered $2.4 billion for the major part of a stake in Vodafone Egypt, which was expected to close at the end of June. The acquisition has already been delayed twice due to disruption of procedures on account of the Covid-19 pandemic.
Vodafone Egypt, with 44 million subscribers and a 40% local market share, is the largest mobile operator in the North African country. Currently Vodafone owns a 55% stake in Vodafone Egypt, and the state-owned operator Telecom Egypt owns 45% of the shares. Telecom Egypt said it has yet to receive an offer from either of the parties and has no information of any terms under consideration. “The inference that Telecom Egypt has a role to play in assisting Vodafone Group and STC to conclude a transaction is unclear and without foundation,” said the company.
As STC intends to expand its operations in the region and beyond, if an agreement is reached, the majority of Vodafone Egypt’s shares will make STC one of the most established operators in the territory. With Egypt being one of the largest telecommunications markets in North Africa, it is a key target for operators looking to enter fast-growing areas.