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Local media suggests that Saudi Telecom Company (STC) is being advised to consider Vodafone as an alternative route into Portugal
According to anonymous sources speaking to Jornal Económico, Saudi Arabia’s telecoms giant STC is considering acquiring Vodafone Portugal.
The news, which remains unconfirmed by both STC and Vodafone, comes following the collapse of discussions between STC and Vodafone’s local rival Altice Portugal last week.
STC began acquisition talks with Altice Portugal at the end of last year, seeing the deal as a way to further cement the company’s growing presence in Europe. At the time, Altice Portugal was notably struggling to find growth and was in the midst of a corruption scandal that is still being investigated today.
Earlier this month, however, reports indicated that discussions between the two companies had been shelved after they reached a bottleneck over pricing.
Previous reports suggested that Altice Group’s billionaire owner, Patrick Drahi, was hoping to raise €10 billion from the sale of its Portuguese unit, but STC believed the unit to be worth less than €8 billion.
With the Altice deal no longer an option, it should come as little surprise that STC is now considering Vodafone Portugal, which has itself been eying up M&A opportunities in recent years.
Back in 2022, Vodafone Portugal had announced its intention to acquire Cabonitel, parent company of its Portugal’s fourth-place mobile player Nowo Communications. Just this week, however, the deal was blocked by the national competition regulator, after an almost two-year investigation concluded that the deal could lead to price hikes for customers.
Thus, with both Vodafone and STC’s plans for Portugal being scuppered in recent weeks, it should come as no surprise that they would consider their options. The companies’ goals broadly align; STC wants a foothold in Portugal and Vodafone wants to bolster its market position.
If the acquisition does come to pass, it will be the latest step in STC’s increasing presence in Iberia. In September last year, STC acquired a €2.1 billion stake in Spanish telecoms giant Telefonica, making them the companies largest shareholder.
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