Vodafone set to stay in Egypt after STC deal collapses

LONDON (Reuters) - Vodafone has ended talks with the Saudi Telecom Company over the $2.4 billion sale of its 55% shareholding in Vodafone Egypt, the British company said on Monday, reaffirming its commitment to the country.

STC, Saudi Arabia's biggest telecoms operator, had struck a preliminary agreement in January with London-listed Vodafone to buy the stake as it sought growth in the Arab world's most populous nation.

But STC has since missed deadlines to complete the deal, citing coronavirus-related logistical challenges to seek an extension on two occasions.

Vodafone Group CEO Nick Read met Egyptian President Abdel Fattah El-Sisi in Egypt at the weekend in a sign the investment is likely to be maintained.

"Vodafone remains optimistic about our continued involvement in the Egyptian market," a company spokesman said.

"Vodafone has been committed to Egypt for more than 20 years, and Vodafone Egypt has a talented team, a strong market position and delivers an attractive return on capital."

STC did not immediately respond to a request for comment.

With 44 million subscribers and a 40% market share, Vodafone Egypt is the country's biggest mobile operator.

Last month it acquired spectrum, with a ten-year term through to 2030, to broaden its network capacity.

Egypt's financial regulator said in February STC would have to offer to buy the 45% of Vodafone Egypt owned by Telecom Egypt if it went ahead with the purchase of Vodafone's stake in the company.

Vodafone had said in January that selling the stake was in line with efforts to streamline its operations to focus on Europe and sub-Saharan Africa.

(Reporting by Keith Weir; additional reporting by Yadarisa Shabong in Bengaluru and Nadine Awadalla in Cairo; editing by Louise Heavens and Mark Potter)