Vodafone to sell Egypt stake to Saudi Telecom for $2.4bn

Vodafone is the leading provider in Egypt, servicing 40 million of the country’s more than 100 million mobile phone lines. (File/Reuters)
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Updated 30 January 2020

Vodafone to sell Egypt stake to Saudi Telecom for $2.4bn

  • Company plans to streamline operations to concentrate more on Europe and sub-Saharan Africa

CAIRO: Vodafone Group has struck a preliminary deal to sell its 55 percent stake in its Egyptian unit to Saudi Arabia’s largest telecoms operator STC for $2.4 billion, the companies said on Wednesday.

It values Vodafone Egypt at around $4.4 billion and the pair agreed to a long-term partnership agreement, which includes use of the Vodafone brand, preferential roaming arrangements, and giving access to Vodafone’s central procurement function.

Selling the stake is in line with Vodafone’s efforts to streamline its global operations in order to focus more on Europe and sub-Saharan Africa, Vodafone CEO Nick Read said.

Vodafone Egypt CEO Alexander Froman added that the company planned to hire more than 1, 000 employees and that the executive structure of the outfit would not be changed. He added that negotiations could take up to two months and that the deal required the approval of various parties. 

Vodafone has 7,800 employees in Cairo and Alexandria. 

Egypt’s Minister of Telecommunication and Information Technology Amr Talaat said that the proposed deal underscored the attractiveness of the telecommunications industry in the country.

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STC, also known as Saudi Telecom, is majority owned by Saudi Arabia’s state fund the Public Investment Fund (PIF).

“This is why a giant telecom company the size of STC invests in this sector,” Talaat said. 

He added that the ministry as well as the National Authority for Telecommunication Regulation would maintain the quality of service offered to the Egyptian public.

“The potential takeover of a successful company like Vodafone goes in line with the company’s strategy to grow regionally,” STC CEO Nasser Al-Nasser said. “We underline our persistence to be pioneers in the telecommunications field not only in Saudi Arabia but also regionally. Vodafone Egypt is the leading player in the Egyptian mobile market and we look forward to contributing further to its continuing success in case the deal is sealed.” 

The deal is expected to be finalized by June 2020, pending due diligence and various regulatory approvals, the two companies confirmed.


Lufthansa to freeze hiring, cut costs over coronavirus

Updated 47 min 8 sec ago

Lufthansa to freeze hiring, cut costs over coronavirus

  • ‘All new hires ... will be reassessed, suspended or deferred’
  • Lufthansa has also slashed connections with Hong Kong in the face of reduced demand

FRANKFURT AM MAIN: German airline Lufthansa said Wednesday it would freeze new hires and use unpaid leave and additional short-time work to cut costs to help cushion the economic impact of the novel coronavirus.
“To counteract the economic impact of the coronavirus of the early stage,” the group, which also owns carriers Austrian and Swiss, said in a statement that “all new hires ... will be reassessed, suspended or deferred.”
Employees would be offered unpaid leave and more part-time work and the group would also seek to cut administrative costs, it said.
“It is not yet possible to estimate the expected impact ... on earnings,” the group said, adding that it would provide more details at its annual results press conference on March 19.
The Frankfurt-based group said 13 of its aircraft were grounded, after it canceled all flights to and from mainland China by its flagship airline, as well as Austrian and Swiss until March 28.
Lufthansa has also slashed connections with Hong Kong in the face of reduced demand “and additional frequency adjustments to and from Frankfurt, Munich and Zurich are planned,” it said.