EGYPT – Vodafone Group’s planned sale of its Egyptian business to Saudi Telecom, Saudi Arabia’s largest telecoms operator, have stalled after the two telecommunication companies failed to reach an agreement

Vodafone Group Plc had in January this year, informed the Egyptian government that it had signed an MoU with the Saudi teleco that could result in the later probably buying 55 percent of International Vodafone’s share in Vodafone Egypt.

In a stock exchange filing by STC to the Saudi Stock Exchange Tadawul, the Saudi Teleco has however, said the two sides have failed to finalize the terms before the MoU’s deadline but agreed to keep the dialogue open.

Originally expected to close in June, the deal would have been STC’s biggest in over a decade and valued Vodafone Egypt at $4.4 billion, Reuters reported.

After the non-binding agreement between the two companies was reached in January, before the spread of coronavirus, STC announced a 90-day extension in April, citing logistical challenges created by the pandemic.

With 44 million subscribers and a 40% market share, Vodafone Egypt is the country’s biggest mobile operator.

The mobile operator is jointly owned by the Vodafone Group and State-owned Telecom Egypt which controls a 45% stake in Vodafone Egypt.

According to financial statements by Vodafone International, the Egypt subsidiary recorded revenues of EGP 26.4bn during the fiscal year (FY) 2019/2020, equivalent to US$1.73 billion.

During the 2019/2020 FY, the Egyptian unit recorded profits worth EGP 6.3bn before interest and taxes during FY 2019/2020, equivalent to US$399.75 million.

This is the second time that Saudi Telecom is trying to have a share of Vodafone Egypt’s cake.

In 2013, STC has tried to enter the Capital of Vodafone Egypt. That year, by entering talks with Telecom Egypt to buy the State-run operator’s 45% share in Vodafone Egypt but no deal was signed.

STC is majority owned by Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF).

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