Doha: Qatar is in advanced talks to buy around $2.5 billion of state-held stakes in Egypt’s biggest mobile network operator and other companies.
Under the potential pact, which is expected to be finalized by the end of this year, Qatar Investment Authority would acquire 20 per cent in Vodafone Egypt from Telecom Egypt Co., according to people with knowledge of the matter. The QIA is the Gulf state’s sovereign wealth fund and oversees an estimated $445 billion in assets.
The people, who asked not to be named because the talks are confidential, didn’t identify the other firms, saying only that they weren’t listed on Egypt’s stock market.
State-owned Telecom Egypt, which began operating in 1854 with the first telegraph line connecting Cairo and Alexandria, acquired its 45 per cent stake in Vodafone Egypt to gain a strategic foothold in the mobile telecommunications market prior to founding its own provider, WE, in 2017. The UK’s Vodafone Group owns 54.9 per cent stake of Vodafone Egypt, and while there was an agreement to sell a majority stake in the company to its Johannesburg-based subsidiary Vodacom Group Ltd. for $2.7 billion last year that transaction hasn’t closed.
Qatar’s support for the now-defunct Muslim Brotherhood administration that held power in Egypt shortly after the 2011 uprising which ousted Hosni Mubarak strained its relationship with the incumbent government, and the pending investment accord is the latest sign that ties are on the mend.
Egyptian President Abdel-Fattah El-Sisi visited Doha last month, and a port cooperation agreement was signed. And earlier this year, Qatar deposited $3 billion into Egypt’s central bank to help the most populous Arab nation contend with soaring food costs.
Qatar is among the world’s richest countries due to its plentiful gas reserves, and the government has been taking steps to diversify the economy in anticipation of a decline in earnings as reserves become depleted and the world moves away from fossil fuels.
Founded in 2005, the QIA has vowed to plow more money into Asia and the US after years of substantial investment in Europe. Even so, it participated in Porsche AG’ s 9.4 billion-euro ($9.1 billion) initial public offering, acquiring a 4.99 per cent stake.