The combined new entity will be owned 54% by PIF and 43.1% by stc Group

The Public Investment Fund (PIF), the sovereign wealth fund of Saudi Arabia, and Saudi telecom group stc announced the signing of definitive agreements whereby PIF will acquire a 51% stake in Telecommunication Towers Company Limited (Tawal) from stc Group.

Tawal is currently the largest telecommunications infrastructure company in Saudi Arabia and one of the largest in the region, with an enterprise value of $5.85 billion. Subsequently, PIF and stc Group will consolidate Tawal and Golden Lattice Investment Company (GLIC) – in which PIF holds a majority shareholding –a new merged entity.

The combined new entity will be owned 54% by PIF and 43.1% by stc Group, with GLIC minority shareholders owning the remaining issued share capital.

The transactions are expected to be completed in the second half of 2024 after obtaining all required regulatory approvals.

Raid Ismail, head of MENA direct investments at PIF said: “Today’s announcement is a significant milestone for the telecommunications industry in Saudi Arabia and the wider region. By bringing together the assets of GLIC and Tawal, we will establish a consolidated platform on which the telecommunications sector can flourish and give people a better experience to best connect communities and businesses. It is also in line with PIF’s strategy and the Saudi Vision 2030.”

“These agreements are part of stc Group’s continuous endeavor to grow and maximize value in the most sustainable manner, by recycling capital while retaining ownership in strategic value-added assets to benefit from the return on these assets and enable expansionnew domains. Today’s announcement is in line with stc Group’s strategy and the pivotal role that the group is playing in accelerating the digital transformation of society and the economy in Saudi Arabia and the region,” said Motaz Alangari, group chief investment officer at stc Group.

The partners noted that the new entity is expected to significantly enhance consumer experience and network coverage, as well as improve connectivity and mobile internet speeds by consolidating Saudi Arabia’s tower assets.

The new merged entity will own approximately 30,000 mobile tower sites and will become one of the largest tower companies globally with estimated annual revenues of approximately $1.3 billion, the partners added.

In October 2023, stc had announced plans to expand its 5G network in over 75 cities across Saudi Arabia. The project is an extension of the group’s success in delivering 5G network to over 90% of its locations in major cities.

The telco is currently the largest operator in Saudi Arabia, with around 20 million mobile subscriptions, representing nearly 40% of the market share.

The Saudi carrier had initially launched its 5G commercial services in June 2019.