Vodafone Group has terminated its talks regarding the sale of 55% of its shareholding in Vodafone Egypt to Saudi Telecom Company (STC).
Nick Reed, CEO of Vodafone Group, announced in a press release on Monday: “We believe that the Egyptian government is committed to an ideal framework for the telecommunications sector, which will enable Vodafone Egypt to achieve the country’s vision of digitisation, financial inclusion, and the establishment of a technology centre to support our growth”.
Ambassador Bassam Radi, the spokesperson for Egyptian Presidency, on Sunday said that President Abdel Fattah Al-Sisi met Nick Reed to review joint cooperation in the telecommunications and information technology sector.
In January 2020, STC said that it had signed a non-binding memorandum of understanding with Vodafone Group to buy its 55% stake in Vodafone Egypt for $2.39bn after a full evaluation of Vodafone Egypt at a value of $4.35bn.
Thus, Telecom Egypt’s 45% stake in Vodafone Egypt was valued at $1.96bn.
In July, the Saudi company announced the extension of the memorandum of understanding for a period of 60 days due to the coronavirus pandemic. In September, the two companies announced that the memorandum of understanding expired without reaching a final agreement.
Telecom Egypt has the right of pre-emption to buy Vodafone Group’s share in its Egyptian unit because the Egyptian company owns 45% stake in Vodafone Egypt.
The Egyptian law requires STC, if it buys Vodafone’s stake in Egypt, to submit an offer to buy the remaining stake that Telecom Egypt holds.
Mohamed Abdullah, CEO of Vodafone Egypt, said that the meeting between President Al-Sisi and Vodafone’s Reed discussed the regulatory environment and market conditions that would help Vodafone Egypt continue its leadership of the telecommunications sector in the country, with a focus on ensuring an optimal framework for the telecommunications sector, to achieve Egypt’s 2030 vision of digitisation and financial inclusion.