PIF will merge TAWAL with Golden Lattice Investment Company (GLIC), a tower portfolio that PIF acquired from one of the Kingdom’s other mobile operators, Kuwait-headquartered Zain Group, in 2022.
A tie up between TAWAL and GLIC has been expected for some time.
“This deal is a welcome but unsurprising announcement for the MENA telecom tower industry,” Christopher Greaves, head of research for MENA at TowerXchange told Capacity.
“PIF own a majority stake in stc and sent an offer to buy TAWAL back in October 2022, so it was known that this was its long-term plan,” he added.
Greaves also said that TowerXchange is aware of Saudi’s third MNO Mobily beginning a process to bring its towers to market.
“We would expect PIF to be the sole bidder to complete the Kingdom’s tower consolidation,” he said.
Combining the 8,069 sites, 60% of which are macro towers, with TAWAL’s ~16,000 towers in Saudi Arabia and the 4,800 sites it bought from United Group across Bulgaria, Croatia and Slovenia will create a towerco with approximately 30,000 sites.
According to TowerXchange’s global towerco league table, this would make the new towerco the 15th or 16th largest towerco in the world, depending on whether the exact figure overtakes Indonesia’s Protelindo.
If Greave's prediction comes true, and all else stays equal, the addition of Mobily's ~11,000 towers would see PIF's investment leapfrog IHS towers to become the worlds 9th largest towerco.
The combined new entity will be owned 54% by PIF and 43.1% by stc Group, with GLIC minority shareholders owning the remaining issued share capital.
The transactions are expected to be completed in the second half of 2024.
TAWAL is the largest towerco in Saudi Arabia, with an enterprise value of $5.85 billion per the agreement.
Raid Ismail, Head of MENA direct investments at PIF said that “by bringing together the assets of GLIC and TAWAL, we will establish a consolidated platform on which the telecommunications sector can flourish and give people a better experience to best connect communities and businesses.”
The deal is in line with the Kingdom’s Saudi Vision 2030 strategy, Ismail added.
“These agreements are part of stc Group’s continuous endeavour to grow and maximize value in the most sustainable manner, by recycling capital while retaining ownership in strategic value-added assets to benefit from the return on these assets and enable expansion into new domains,” said Motaz Alangari, group chief investment officer of stc Group.
Estimated annual revenue of the new towerco sits at $1.3 billion.
