Vodafone has sold its 55% stake in Vodafone Egypt to STC for $2.39 billion. The remaining 45% in the company is held by Telecom Egypt, which says it has no plans to sell. This values the operator at around $4.35 billion.
The deal will see STC and Telecom Egypt licensing the Vodafone brand, and includes preferential roaming arrangements, as well as access to other services such as Vodafone’s central procurement function.
Vodafone is not selling its shared services centres in Egypt, which collectively employ almost 8,000 staff. Known as ‘Vodafone Intelligent Solutions’, the company is planning to recruit an additional 1,000 staff into these centres.
Commenting on the acquisition, Nasser al Nasser, CEO of STC, said: “The potential acquisition of Vodafone Egypt is in line with our expansion strategy in the MENA region. The transaction, which is still subject to a detailed due diligence, confirms STC’s eagerness to maintain a leadership position not only in the KSA, but also in the wider region.”
Nick Read, Vodafone CEO, said the sell-off was in line with Vodafone’s strategy to create two clearly delineated regions within the group, which the company would concentrate on going forward (Europe and sub-Saharan Africa). Vodafone Egypt did not fit this geographical segmentation, being stuck between the two regions.
The sell-off will also help Vodafone reduce its debt in a similar manner to Telefonica’s recent announcement that it will offload half of its interest in its Latin American properties (see Telefonica seeks partner to accelerate growth)
If the deal gets regulatory approval it will close by the end of June 2020.
At the same time, Comtech announced it would be buying Israeli firm Gilat Satellite Networks for $577 million. The combined companies will employ 3,000 people and have revenues of $926 million, offering satellite technology, public safety and location technology and secure wireless solutions to commercial and government customers. Under the terms of the deal, Gilat will become a subsidiary of Comtech but will maintain its own brand.
The Gilat acquisition will add high-performance TDMA-based satellite modems and next generation solid-state amplifiers to Comtech’s portfolio, enabling it to expand in the in-flight connectivity and cellular backhaul markets.
“The acquisition better positions Comtech to take advantage of key marketplace trends, particularly the growing demand for satellite connectivity and the enormous long-term opportunity set that is emerging in the secure wireless communications market. I believe that the combination of accelerating satellite connectivity demand and the increasing availability of low-cost satellite bandwidth, makes this a perfect time to unify Comtech and Gilat’s solutions and offer our combined customers best-in-class platform-agnostic satellite ground station technologies.”
Gilat chairman Dov Baharav said: “The Gilat Board of Directors and management believe this highly strategic combination is compelling…I have long admired Comtech’s commitment to technology leadership and I firmly believe that employees will have expanded opportunities for career development. No doubt, the future will be very bright for Comtech and Gilat and all of our stakeholders.”
Readers will no doubt remember Baharav from his days as CEO of Israeli software vendor Amdocs, where he oversaw a period of substantial growth and expansion.