Vodafone Group is downsizing its investment in Egypt’s telecommunication market. The company’s stake in Vodafone Egypt will be acquired by Saudi Telecom Co., ruling out the possibility of full acquisition of the subsidiary, which is co-owned with the Egyptian government’s firm, Telecom Egypt.
Shares of Vodafone Egypt had been on the radar of Saudi Telecom Co. for years. Saudi Telecom Co. had first shown interest in the telecommunications company six years ago. The deal didn’t materialise; the Saudi firm had been weighing a bid for the minority 45% stake.
Saudi Telecom Co. is in talks with Vodafone Group to acquire its majority stake in Vodafone Egypt.
The Egyptian unit’s Chief Executive Officer reportedly planned a meeting with the prime minister, a Bloomberg report disclosed. Both the Saudi and Vodafone haven’t confirmed the acquisition plan publicly.
Telecom Egypt not selling: Six years ago, when Saudi Telecom Co. first showed interest in the Vodafone unit, Vodafone Group had also wanted to buy out the Egyptian state-run telecommunication company’s stake in the unit but the interest didn’t yield any deal.
Telecom Egypt is still insisting that its holdings in the unit are not for sale, after announcing that the state-run telecom firm hadn’t received any offer.
[READ MORE: Union Bank downsizes operations, sells UK arm to MBU Capital)
According to the report, Telecom Egypt stated that it would only sell its stake in Vodafone Egypt when its investment begins to be affected by the growth level of its market share.
What you need to know: Apart from telecommunications business, Vodafone is also operating in the mobile payment market with M-Pesa in Kenya, where M-Pesa largely dominates the mobile payment market. M-Pesa is the biggest mobile payment service firm in Africa due to its success in Kenya where it disrupted the banking industry.
Vodafone also made an inroad into the cryptocurrency market in 2019, joining Facebook’s goal to launch Libra, a digital currency.
Nairametrics, however, reported this week that the company had withdrawn from the Libra Association.
