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Home » Economy » Saudi Arabia’s PIF and STC Group Merges to Create The Region’s Largest Tower Company
Saudi Arabia’s PIF and STC Group Merges to Create The Region’s Largest Tower Company
Saudi Arabia_s PIF and STC Group Merges to Create The Regions Largest Tower Company

Saudi Arabia’s Public Investment Fund (PIF) has acquired a majority stake in Saudi Telecom’s tower unit for $3.15 Billion to merge it with other local assets to create a regional mobile tower giant.

The PIF will own 54% and STC 43% to manage approximately 30,000 towers across five countries, supporting Vision 2030’s economic transformation.

With this new venture, STC will inject about 533 million riyals in capital and use proceeds from selling its towers unit, Tawal, to support expansion locally and abroad.

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The Public Investment Fund’s Acquisition

Image Credit The PIF

The PIF, the world’s 5th largest sovereign wealth fund, has agreed to buy a 51% stake in Saudi Telecom’s tower unit, worth $3.15 billion. This ambitious acquisition is aimed at merging the unit with other local assets, forming a new mobile tower giant. 

This strategic acquisition paves the way for creating a regional mobile tower giant. The move is based on the PIF’s strategy to create a consolidated platform where the telecommunications sector can thrive. 

PIF and STC Ownership

Image Credits Getty Images

Following the acquisition, the PIF will own 54% of the new venture, while Saudi Telecom Company (STC) will hold 43%. This ownership structure allows for a unique collaboration to manage approximately 30,000 mobile tower sites across five countries.

STC’s Role in the New Venture

STC’s role in this new venture is multi-faceted. The company will inject about 533 million riyals in the new entity’s capital to maintain ownership. Moreover, STC plans to use the proceeds from selling its tower unit, TAWAL, to support expansion initiatives locally and abroad.

The Vision 2030 Connection

Image Credit Vision 2030

The PIF’s acquisition aligns with the broader goals of Saudi Arabia’s Vision 2030. This ambitious initiative aims to transform the country’s economy, diversify its income sources, and develop public service sectors. 

By forming the region’s largest telecom tower company, the PIF, which became the top global sovereign wealth fund investor in 2023, aims to contribute to the vision’s objectives, particularly in fostering economic diversification.

Impact on Telecommunication Infrastructure

The creation of the new entity is projected to greatly enhance the overall consumer experience and expand network coverage in Saudi Arabia. Additionally, the consolidation of tower assets is expected to result in improved connectivity and increased mobile internet speeds. 

This move will also lead to operational efficiencies, promote innovation in the telecommunications industry on a regional and global scale, and contribute to the development of a more streamlined and efficient business environment.

The new venture will deliver operational efficiencies and drive broader innovation in the telecommunications sector. This will have ripple effects across the region and globally, supporting the development of a more efficient and frictionless business environment.

Unlocking the Consolidated Potential

The agreement between PIF and STC Group signifies their collective ambition to integrate and strengthen the Saudi telecommunication infrastructure sector. This integration is expected to unlock the sector’s consolidated potential, further bolstering Saudi Arabia’s position as a regional telecom powerhouse.

TAWAL’s Acquisition of Infrastructure Assets

Image Credit Tawal

The move to create a regional giant follows TAWAL’s acquisition of infrastructure assets in Bulgaria, Croatia, and Slovenia. This acquisition has positioned TAWAL as the region’s largest independent tower company. The new merged entity will continue to build on this momentum.

Revenue Projection of the New Entity

The new merged entity is expected to generate significant revenues. With approximately 30,000 mobile tower sites under its management, the company is projected to become one of the largest tower companies globally. It’s estimated to pull in annual revenues of approximately $1.3 billion.

Redefining Saudi’s Telecommunications Landscape

The PIF’s acquisition of a majority stake in Saudi Telecom’s tower unit and the resulting creation of a regional mobile tower giant is a significant milestone. This move aligns with Saudi Arabia’s Vision 2030 and is a testament to the PIF’s commitment to fostering economic growth and diversification. 

With this new venture, the PIF is set to redefine the telecommunications landscape in the region, bolstering connectivity and fostering innovation.

More PIF’s Ventures

The PIF’s Launch of ALAT

Image Credit The PIF

The Public Investment Fund has launched ALAT, a company intended to establish the Kingdom as a leading center for Electronics and Advanced Industries globally.

ALAT will focus on producing semiconductors, robotics, advanced computing systems, intelligent household appliances, and digital entertainment goods.

With ambitions to generate 39,000 employment opportunities, ALAT aims to bolster Saudi Arabia’s non-oil GDP by $9.3 Billion by 2030.

The PIF’s Magic Leap Investment 

Image Credit Magic Leap

The Public Investment Fund has invested $590 million in Magic Leap, a U.S.-based company known for its expertise in immersive virtual reality headsets, directly competing with Apple’s Vision Pro. 

This strategic move coincides with the imminent release of Apple’s Vision Pro, priced at $3,499, further escalating the rivalry among Magic Leap, Meta, and Apple. 

With this considerable financial injection, Magic Leap’s total funding now surpasses $4.5 billion, positioning it for a potential technological revolution. 

The PIF’s Stake in MEPCO

Image Credit The PIF

The Public Investment Fund of Saudi Arabia has successfully acquired a 23.08% stake in the Middle East Paper Company, also known as MEPCO.

This strategic acquisition is designed to provide substantial support for expanding MEPCO’s core. business, focusing on producing and recycling paper-based products across the Middle East and North Africa. 

Additionally, the move aims to extend the PIF’s influence in the construction sector by fostering the manufacture of specialized building materials, including gypsum. This strategic approach contributes to the development of local supply chains and reinforces Vision 2030’s broader objectives.

Keep Reading: Saudi Arabia’s PIF Assets Rise To $940 Billion Making It World’s Fifth Largest SWF

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