STC buys into Egypt with acquisition of Vodafone stake

Vodafone Group has agreed a deal to sell its 55 per cent stake in Vodafone Egypt to Saudi operator STC for US$2.4 billion, as part of plans to reduce debt and refocus on core markets.

With 44 million subscribers and a 40% market share, Vodafone Egypt is the country’s biggest mobile operator. Other mobile operator competitors are Orange Egypt and Etisalat Misr and Telecom Egypt.

Vodafone CEO Nick Read said the deal, which values the business at US$4.4 billion, is consistent with efforts to simplify the operator group to “two differentiated, scaled geographic regions: Europe and sub-Saharan Africa”.

STC is yet to complete due diligence on the acquisition, which will also require regulatory approval.

Vodafone said it expects to close the deal by end-June, with terms of a partner market agreement already in place that will see the Egyptian operator continue to use the Vodafone brand and have access to its central procurement along with “a range of other services”.

State-owned operator Telecom Egypt also owns a stake in Vodafone Egypt.