(Bloomberg) — Vodafone Group Plc ended talks to sell its Egyptian business to Saudi Telecom Co., a deal that would have been valued at as much as $2.4 billion.
Vodafone didn’t provide a reason for abandoning the discussions to sell its 55% shareholding in Vodafone Egypt in a statement published Monday. The remaining shares in Vodafone Egypt are held by state-controlled Telecom Egypt.
Saudi Telecom had offered to pay $2.39 billion for the stake in January, and parties had extended talks because of delays to due diligence, amid coronavirus restrictions. Saudi Telecom had been in discussions to reduce its offer, Bloomberg reported back in September.
Saudi Telecom shares dropped as much as 2.1% in Riyadh trading on Monday before paring losses.
Vodafone Group’s Chief Executive Officer Nick Read met Egyptian President Abdel-Fattah El-Sisi in Cairo in recent days to discuss boosting investment in the country, as well as the development of a 5G network in the new administrative capital, according to a Facebook post by the presidential spokesman on Sunday.
“We believe that the Egyptian government is committed to an optimal framework for the telecoms sector, which will enable Vodafone Egypt to deliver on the country’s vision of digitization and financial inclusion and create a technology hub to support our growth in the African region,” Read said in the statement.
Vodafone has been focusing its global footprint on Europe and Africa since Read took over in 2018, as part of his strategy to squeeze more out of what he deems the company’s core assets while paying down debt. The company recently sold units in New Zealand and Malta, and is targeting an IPO of its mobile mast business in early 2021.
Egyptian market regulations would require Saudi Telecom to submit a mandatory tender offer for all of Vodafone Egypt, including the stake held by Telecom Egypt.