Saudi Telecom Company (STC) has announced a 90-day extension of the Memorandum of Understanding (MoU) it signed for the acquisition of 55% stake in Vodafone Egypt valued at US$2.4 billion.

Citing challenges due to the COVID-19 pandemic, STC issued a statement which read in part: “The parties need more time to complete the processes related to the transaction, including the due diligence and they have therefore agreed to extend the MoU for 90 days starting from 13 April 2020. Both parties will be working to progress the transaction as set out in the MoU during this period.”

In late January 2020, STC signed a non-binding MoU with Vodafone Group in relation to the potential acquisition of Vodafone’s 55% shareholding in Vodafone Egypt.‬‬‬‬‬‬‬‬

The deal was expected to close in June 2020 and would position STC as the majority shareholder in Vodafone Egypt with Telecoms Egypt controlling the remaining 45% stake.

Once completed, the deal will enable STC to fulfill its ambition to expand in the Middle East North Africa (MENA) region and further explore the opportunity to acquire a 4G license.

"The potential acquisition of Vodafone Egypt is in line with our expansion strategy in the MENA region. The transaction, which is still subject to a detailed due diligence, confirms STC's eagerness to maintain a leadership position not only in Saudi Arabia, but also in the wider region,” said Nasser al Nasser, CEO of STC.

According to Nasser STC was attracted to Vodafone Egypt because of its leadership status in the Egyptian mobile market.

ITWeb Africa reported Vodafone and Saudi Telecoms entered into a long-term Partner Market Agreement in which Vodafone's exit will not lead to the immediate termination of the use of the Vodafone brand.

Vodafone Group’s exit of its Egypt subsidiary is consistent with the group's efforts to simplify across 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 Vodafone Intelligent Solutions," said Vodafone Group CEO Nick Read.