Dubai: Saudi Arabia’s wealth fund PIF is buying a 51 per cent stake in Tawal, the biggest telecommunications infrastructure company in Saudi Arabia and one of the largest such in the region with an enterprise value of $5.85 billion.
The stake was previously held by Saudi Telecommunications Company (stc Group).
PIF and stc Group will now consolidate Tawal and Golden Lattice Investment Company (GLIC) – in which PIF holds a majority shareholding – into a new merged entity. This forms the ‘largest regional company in the telecommunication infrastructure sector’.
The new entity will be owned 54 per cent by PIF and 43.1 per cent 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.
What the new Saudi company will have
The new merged entity will have about 30,000 mobile tower sites and become one of the largest tower companies globally with estimated annual revenues of around $1.3 billion.
According to Raid Ismail, Head of MENA Direct Investments at PIF, “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.
“Fast, reliable and accessible connectivity is a key enabler of growth and a cornerstone for the society, and these agreements mark a major stride towards a more interconnected digital future.”
Combining Tawal and GLIC is a stepping-stone to consolidating the Saudi tower market and driving further efficiencies and operational excellence to deliver superior experiences and value for customers
– Motaz Alangari, Group Chief Investment Officer of stc Group
Priorities for new entity
Once operational, the new company is expected to ‘significantly’ raise network coverage, as well as improve connectivity and mobile internet speeds. This will be done by consolidating Saudi Arabia’s tower assets.
“It will also deliver operational efficiencies, help drive wider innovation in the telecommunication sector across the region and globally, and support development of a more efficient and frictionless business environment,” said a statement.
The agreement between PIF and stc Group will in the longer term ‘unlock’ the consolidated potential of the Kingdom’s telecom infra sector.
It also follows Tawal’s buy of infrastructure assets in Bulgaria, Croatia and Slovenia, making this ‘Saudi national champion the region’s largest independent tower company’.