Vodafone sells stake in Egypt business to STC for $2.4 bn

Vodafone Group has agreed to sell its 55 percent stake in Vodafone Egypt to Saudi Telecom Company (STC) for $2,392 million or €2,171 million in cash.
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Vodafone Egypt reported revenue of €1,272 million in 12 month period to September 2019. Capex of Vodafone Egypt was €211 million.

Vodafone Egypt is valued at $4,350 million or €3,948 million, implying a September FY’20 LTM multiple of 7.0x Adjusted EBITDA and 11.2x Adjusted OpFCF.

STC and Vodafone have also agreed the basis for a long-term Partner Market Agreement, which will include use of the Vodafone brand, preferential roaming arrangements, access to Vodafone’s central procurement function, and other services.

Vodafone will continue to have a significant presence in Egypt through its Shared Services centres, recently rebranded as _VOIS (Vodafone Intelligent Solutions). The centres in Cairo, Giza and Alexandria employ around 7,800 people and provide services to Vodafone’s operations around the world. Vodafone has plans to recruit at least 1,000 more people over the coming 12-18 months.

Vodafone Group CEO Nick Read said: “This transaction is consistent with our efforts to simplify the Group to two differentiated, scaled geographic regions – Europe and sub-Saharan Africa. It will reduce our net debt.”

STC CEO Nasser al Nasser said: “The potential acquisition of Vodafone Egypt is in line with our expansion strategy in the MENA region.”

Vodafone Group and STC will enter into definitive agreements following completion of due diligence on Vodafone Egypt by STC. The transaction is expected to close by the end of June 2020, subject to regulatory approval.