(Adds Telecom Egypt statement)
DUBAI/CAIRO, Jan 29 (Reuters) - Vodafone Group has
struck a preliminary deal to sell its 55% stake in its Egyptian
unit to Saudi Arabia's largest telecoms operator STC
for $2.4 billion, the companies said on Wednesday.
The non-binding deal values Vodafone Egypt at $4.4 billion
and the two companies have agreed a arrangement over the
long-term use of the Vodafone brand and other services in Egypt.
Selling the stake is in line with Vodafone's efforts to
streamline its operations to focus on Europe and sub-Saharan
Africa, Vodafone Chief Executive Nick Read said.
"It will reduce our net debt and unlock value for our
shareholders," he said.
Vodafone said the transaction was expected to close by June.
STC said the non-binding agreement was valid for 75 days from
Wednesday and could be extended by mutual consent.
"Vodafone Egypt is the leading player in the Egyptian mobile
market and we look forward to contributing further to its
continuing success," said STC Chief Executive Nasser al-Nasser.
The binding agreement is subject to approvals by STC and
Vodafone, and regulators. STC said no other parties were
involved in the potential deal.
STC, also known as Saudi Telecom, is majority owned by Saudi
Arabia's state fund the Public Investment Fund (PIF).
Telecom Egypt, which also owns a stake in Vodafone
Egypt, said on Wednesday it was closely monitoring the process
"to study all available alternatives for it to handle its
investments in Vodafone Egypt".
The state-owned company said on Sunday it had no intention
of selling its stake.
(Reporting by Alexander Cornwell, Stephen Kalin and Ehab
Farouk; Editing by Louise Heavens and Mark Potter)
Vodafone (VOD)