Both parties have agreed to a long-term partner market agreement, which includes use of the Vodafone brand, preferential roaming arrangements, access to Vodafone’s central procurement function as well as a range of other services that will enable Vodafone Egypt to continue to offer its customers the best products and services.
“The potential acquisition of Vodafone Egypt is in line with our expansion strategy in the MENA region,” said Nasser al Nasser, chief executive of STC. “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. Vodafone Egypt is the leading player in the Egyptian mobile market, and we look forward to contribute further to its continuous success.”
In addition, Vodafone will continue to have a strong presence in Egypt through shared services centres, that have recently been rebranded as VOIS (Vodafone Intelligent Solutions). Its centres in Cairo, Giza and Alexandria provide a range of services to Vodafone’s global operations. The company plans on hiring at least 1,000 more staff over the next 18 months.
Nick Read, chief executive of Vodafone Group. “Under STC, I believe they will continue to flourish. This transaction is consistent with our efforts to simplify the Group to two differentiated, scaled geographic regions - Europe and sub-Saharan Africa. Additionally, it will reduce our net debt and unlock value for our shareholders. We look forward to continuing our close relationship with the business through a Partner Market agreement and building on our significant shared service operations in Egypt, known as VOIS.”
The cash price of exactly $2.392 million for Vodafone’s 55% stake in Vodafone Egypt is equal to an Enterprise Vale of 100% of Vodafone Egypt at $4.350 million. This figure implies a September FY20 last twelve months multiple of 7x Adjusted EBITA and 11.2x Adjusted Operating Free Cash Flow.
After a process of due diligence, both parties plan on entering into definitive agreements as soon a possible with the deal set to close by June 2020, subject to regulatory approval.
