CAIRO: Vodafone and Telecom Egypt announced on Thursday that they had entered into a strategic partnership to increase cooperation between both parties and to jointly develop a range of products and services for the Egyptian market.
The agreement will focus on restructuring the Vodafone Egypt Board, reflecting the new shareholding structure and its extension of distribution channels for Vodafone products and services throughout Telecom Egypt’s outlets.Telecom Egypt will continue to provide exclusive international gateway services for Vodafone Egypt under an extension of the current agreement.
Vodafone *also intends to launch a tender offer for an additional 4.9 percent of the shares in Vodafone Egypt at a price of LE 100 per share for a maximum possible consideration of LE 1.176 billion (£108 million). Telecom Egypt has given an irrevocable undertaking to accept the tender in respect of at least 3.97 percent and up to 4.69 percent of the shares in Vodafone Egypt.
If fully accepted, this tender offer will take Vodafone s shareholding in its Egyptian subsidiary to 55 percent, with 45 percent held by Telecom Egypt. Subject to regulatory approvals, the tender offer is expected to be launched next week.
Paul Donovan, CEO of Vodafone s EMAPA Region (Eastern Europe, Middle East, Asia Pacific and Affiliates), said: “We are very pleased to have agreed a strategic partnership with Telecom Egypt, which further strengthens the working relationship both companies have as Vodafone Egypt shareholders.
“The purchase of additional equity in Vodafone Egypt shows Vodafone s commitment to the Egyptian market, which is further reinforced by our partnership with Telecom Egypt to develop and expand products and services.
Akil Beshir, Chairman and CEO of Telecom Egypt added: “Today we have signed a strategic partnership which will ensure that the most cutting-edge products and services will be available in Egypt. This move will make it possible for Vodafone Egypt to take advantage of the products and services from TE Data and other parts of Telecom Egypt as well as increasing the opportunities for Vodafone Egypt to sell its services through Telecom Egypt. This agreement will also allow Telecom Egypt to maintain a substantial portion of the international voice services volumes from Vodafone Egypt after the liberalization of international gateway services in Egypt .
Ian Gray, CEO of Vodafone Egypt added: “Vodafone Egypt now has a strong strategic partnership between its two major shareholders that is the basis on which we can tailor the global services and experience of the Vodafone Group to the unique requirements of the Egyptian consumer. This agreement puts Vodafone Egypt on a firm footing to capture future growth in the Egyptian telecommunications market.