Vodafone has struck a deal to sell 55% of its shares in its Egyptian business to Saudi Telecom Company (STC).
The firms signed a memorandum of understanding, which agreed the basis for a long-term partner market agreement.
The deal includes the use of the Vodafone brand, preferential roaming arrangements, access to Vodafone’s central procurement function, and a range of other services.
The remaining 45% of shares belong to state-owned Telecom Egypt.
The $2.4bn deal forms part of Vodafone’s efforts to streamline its operations in order to focus on its business in Europe and sub-Saharan Africa, said Nick Read, Vodafone’s chief executive.
“I am deeply proud of our business in Egypt, being the clear number one leader in the market. Under STC, I believe they will continue to flourish… Additionally, the transaction will reduce our net debt and unlock value for our shareholders.”
Nasser al Nasser, chief executive of STC, added: “The potential acquisition of Vodafone Egypt is in line with our expansion strategy in the MENA region. The transaction confirms STC’s eagerness to maintain a leadership position not only in Saudi Arabia, but also in the wider region.
“Vodafone Egypt is the leading player in the Egyptian mobile market and we look forward to contributing further to its continuous success.”
The deal is expected to close by the end of June 2020 and is subject to regulatory approval.
Vodafone Egypt, which has been valued at $4.4bn, will continue its presence in Egypt by focusing on its shared services business. Vodafone’s shared service centres employ 7,800 people in Cairo, Giza, and Alexandria. The firm plans to recruit around 1,000 people within the next 18 months.