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Large Middle Eastern operators want to expand their international presence
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stc reportedly is interested in Altice Portugal
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stc already has acquired United Group’s tower assets in Bulgaria, Croatia and Slovenia
Earlier this year, Fierce Wireless advised keeping a close eye on large Middle Eastern operators that are keen to expand their international presence, with a particular focus on Europe.
Fast forward to March, and Saudi Arabia-based operator stc Group is reportedly eyeing up a couple of potential acquisitions, both situated on the Iberian Peninsula.
According to Bloomberg, stc has now emerged as the highest bidder for scandal-hit Altice Portugal, which Altice Group founder and owner Patrick Drahi is hoping to sell for as much as €10 billion to help reduce the group’s $60 billion debt burden.
The report said the two other interested parties, Xavier Niel’s Iliad Group and a Warburg Pincus-led consortium, have been invited to improve their offers, although the price tag for Altice’s Portuguese operations is proving to be somewhat unappealing to investors.
Meanwhile, Spanish newspaper El Economista reports that stc is additionally eyeing up Spanish rural broadband provider Avatel Telecom, said to be valued at about €1 billion.
At the same time, former Spanish incumbent Telefónica is also said to be interested in buying Avatel, no doubt to bolster its fiber network assets ahead of the planned merger of rivals Orange and Masmovil.
Expansion strategy
As part of its international expansion strategy, stc has already acquired United Group’s tower assets in Bulgaria, Croatia and Slovenia and has now brought them under wireless infrastructure subsidiary TAWAL.
It also somewhat controversially acquired a minority stake in the former Spanish incumbent Telefónica. The Saudi operator currently owns a 4.9% stake and is set to increase this to 9.9% should it receive regulatory approval.
In fact, El Economista suggests that stc is interested in buying Altice Portugal and Avatel as part of a wider plan to form an Iberian alliance with Telefónica. For example, the acquisition of Altice could enable it to explore synergies with Telefónica, while it could use Avatel as a bargaining chip to increase its shareholding in the former incumbent to above 9.9%.
Also worth noting is that the Saudi group has been linked to Telecom Italia, should the Italian telco’s main shareholder Vivendi decide to sell its 24% stake, according to reports. Furthermore, U.K. broadsheet The Times reported last year that stc had been talking to Drahi about buying all or some of Altice’s almost 25% stake in U.K. operator BT.
As for stc’s regional peers, equally acquisitive e& (formerly Etisalat) acquired a stake in Vodafone in May 2022, gradually raising it to 14.6% over subsequent months.
In February, Vodafone confirmed that UAE-based e&’s chief executive Hatem Dowidar will be joining its board as non-executive director, effective February 19 after the necessary regulatory approvals were obtained.