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The sovereign wealth fund of Saudi Arabia, the Public Investment Fund (PIF) has signed a deal with telco stc, through which PIF will acquire 51% of Telecommunication Towers Company Limited (TAWAL) from stc
PIF also owns an 80% stake in Golden Lattice Investment Company (GLIC). Following the deal signing, PIF and stc group are set to merge both TAWAL and GLIC into a new entity. This company will become one of world’s the largest company in the telecommunication infrastructure sector at an enterprise value of $5.85 billion, with 30,000 mobile tower sites and annual approximate revenues of $1.3 billion according to the press release
The combined new entity will be owned 54% by PIF and 43.1% by stc Group, with GLIC minority shareholders owning the remaining shares.
The deal will ensure the creation of a ‘critical national digital infrastructure asset’ that aligns with Saudi Arabia’s Vision 2030 – a government launched programme to increase “economic diversification, global engagement, and enhanced quality of life.”
The government has recognised that the telecoms industry is essential to reaching these goals. “Fast, reliable and accessible connectivity is a key enabler of growth and a cornerstone for the society,” said Raid Ismail, Head of MENA Direct Investments at PIF.
The transaction is pending standard regulatory approval, and is expected to be competed in the latter half of this year.
“Combining TAWAL and GLIC is a stepping-stone to consolidating the Saudi tower market and driving further efficiencies and operational excellence to deliver superior experiences and value for customers,” continued Motaz Alangari, Group Chief Investment Officer of stc Group.
This is not the first move towards consolidation in the region’s telecoms market. Last July, Qatar’s largest telecom company Ooredoo, Dubai’s TASC Towers and Kuwait-based Zain Group began talks to combine their mobile tower operations into a jointly owned independent company, which was finalised in December. The deal was valued at $2.2 billion, and will see 30,000 tower assets be combined over six countries, Qatar, Kuwait, Algeria, Tunisia, Iraq and Jordan.
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