TELECOM EGYPT TO ACQUIRE AN ADDITIONAL 8% STAKE IN VODAFONE EGYPT

Mergers, Acquisitions and Financial Results

Telecom Egypt is currently in negotiations to acquire an additional 8% stake in Vodafone Egypt, potentially raising its ownership up to 25%.

This latest development comes following news earlier this month that Telecom Egypt and Vodafone Egypt have signed an initial agreement by which Telecom Egypt will acquire a 16.9% stake of Vodafone Egypt’s outstanding shares, for a total consideration of between LE810 ­ LE850 million.

Within the context of the associated agreement, Telecom Egypt forfeits its right to establish a third mobile network for a period of four years, in return for a LE2 billion fee, to be paid jointly by the existing mobile operators, namely Egyptian Company for Mobile Services ­ECMS (EMOB.CA) and Vodafone Egypt over the associated four year time frame.

The contract further allows both operators to expand respective frequencies to 1,800 bandwidth, versus the current 900 bandwidth frequency, in turn improving the quality of services on offer. It should be noted, the new agreement does not provide for any definitive exclusivity period for the current duoploy.

Prime Securities