The long-running investment saga involving telecoms giant Vodafone, its Egyptian operation and Saudi Telecom Company (STC) seems to have ended with no deal.
A number of news agencies have now reported that, nearly a year after the likely sale became news, Vodafone has ended talks to sell its Egypt stake to the Saudi operator.
News of the end of the $2.4 billion sale of Vodafone’s 55 percent shareholding in Vodafone Egypt may not have been a major surprise, coming as it did after a series of missed deadlines to complete the deal.
Nevertheless, as we reported on 14 September, Vodafone Group remained confident of selling its Egypt unit to STC, despite the missing of a deadline to finalise terms.
Vodafone noted at the time that it “remained in discussion with STC to finalise the transaction in the near future” and added: “Vodafone now looks to STC and Telecom Egypt to find a suitable agreement to enable the transaction to close.” State-owned Telecom Egypt holds the remaining 45 percent stake in the operator.
The preliminary deal to buy the stake goes as far back as January, signalling STC’s ambition to gain a stronger foothold in the telecoms market of the Arab world's most populous nation. With 44 million subscribers and a 40 percent market share, Vodafone Egypt is the country's biggest mobile operator.
For Vodafone, meanwhile, the selling of the stake was in line with efforts to streamline its operations to focus on Europe and sub-Saharan Africa. Both parties, therefore seemed to be strongly motivated to go ahead. However, STC cited coronavirus-driven logistical challenges when it sought an extension twice to the initial agreement, first in April and then in July.
A brief statement from Vodafone CEO Nick Read gave little away, so, while the disruption caused by this year’s pandemic is no doubt a significant factor, any other reasons for the end of the deal will remain a mystery for now.