Saudi Arabia’s state-owned Public Investment Fund (PIF) has made a significant move in the telecommunications sector by acquiring a principal shareholding in Saudi Telecom Co.’s tower unit, amounting to $2.3 billion. This strategic purchase is intended to spearhead the formation of the largest telecom tower company within the region.
The PIF now controls a commanding 51 percent stake in Telecommunication Towers Company Limited (TAWAL), the foremost telecommunications infrastructure organization in the nation and a major player in the region. The company is presently valued at an enterprise value of $5.85 billion.
Following the acquisition, PIF, alongside stc Group, will embark on a merger of TAWAL with the Golden Lattice Investment Company (GLIC), a firm where PIF also has a majority stake. The outcome will be a new, consolidated entity.
This move comes on the heels of TAWAL’s recent expansion into European markets, having secured infrastructure assets in Bulgaria, Croatia, and Slovenia. This fortifies TAWAL’s position as the region’s preeminent independent tower company.
The resultant merged corporation will boast a portfolio of roughly 30,000 mobile tower sites. It is poised to rank among the world’s most substantial tower operators, with projected annual revenues reaching $1.3 billion.
In the ownership structure of the new conglomerate, PIF will be the majority shareholder with a 54 percent stake. stc Group will hold 43.1 percent, and the balance will be held by minority investors.
The completion of these transactions is anticipated for the latter half of 2024, pending the necessary regulatory consents and fulfillment of other conditions stipulated in the agreements, as per PIF’s announcement.
Raid Ismail, who heads the MENA Direct Investments at PIF, remarked that the agreements are a significant leap towards a digitally interconnected future, emphasizing the importance of swift and reliable connectivity for societal and economic growth.
The creation of this new entity is projected to substantially uplift the consumer experience in network services, augment network coverage, and enhance connectivity and mobile internet speeds by consolidating tower assets in Saudi Arabia.
In addition to these consumer benefits, the merger is expected to yield operational efficiencies, spur broader innovation across the telecommunication sector regionally and globally, and facilitate a smoother business environment.