Saudi Arabia’s Public Investment Fund (PIF) is considering a plan to merge the tower portfolios of Saudi Telecom Company (stc) and Zain Saudi, according to Arab News. The merger would make PIF the largest tower company in the Kingdom and reduce overlaps of coverage, Bloomberg reported.
With Zain’s 8,069 towers under its control in addition to stc’s 14,000 tower portfolio, PIF will have over 23,000 towers. Arab News reported that PIF’s next likely move is to have the company listed on the Saudi Stock Exchange (Tadawul).
If completed, the deal for Zain’s portfolio at an estimated $484 million, would leave the sovereign wealth fund with 60 percent ownership. Prince Saud bin Fahad bin Abdulaziz and Sultan Holding Co. will each own 10 percent. Zain will still maintain a 20 percent share, according to inside sources. The deal involves the sale of its tower infrastructure, while retaining all other wireless communication antennas, software, and technology.
PIF has appointed Goldman Sachs Saudi Arabia, HSBC Saudi Arabia, Morgan Stanley Saudi Arabia and Saudi National Bank Capital to evaluate the potential transaction options. “The potential transaction is in line with the PIF’s strategy to recycle its capital to new investments,” PIF said in a statement. “The deal also expected “to contribute to the medium and long-term value for all of stc’s investors by diversifying the company’s investor base and increasing its free float and weight in relevant international indices.”
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