• Saudi’s PIF and STC form deal to create the region’s largest telecom tower company, with PIF acquiring 51% of TAWAL from STC Group.
• The consolidation of TAWAL and GLIC into a new entity will comprise around 30,000 mobile tower sites and an estimated annual revenue of $1.3 billion.
• PIF will hold a majority stake of 54%, STC will retain 43.1%, and GLIC minority shareholders will own the rest, with the transaction expected to conclude in the latter half of the year.

Saudi Arabia’s Public Investment Fund (PIF) and STC have reached an agreement to establish the largest telecom tower company in the region, with PIF acquiring a 51% stake in Telecommunication Towers Company Ltd (TAWAL) from STC Group. 

This strategic move paves the way for the consolidation of TAWAL and Golden Lattice Investment Company (GLIC) into a newly formed entity boasting approximately 30,000 mobile tower sites and an estimated annual revenue of $1.3 billion.

The new entity will be majority-owned by PIF with a 54% stake, while STC will retain 43.1% ownership, and GLIC minority shareholders will hold the remaining share capital. The transaction, including the sale of the 51% stake for an expected cash consideration of 8.7 billion riyals ($2.32 billion), is anticipated to be completed in the latter half of the year.

“This deal marks a significant milestone in establishing the region’s largest Tower company with 30k towers valued at USD 6.7bn,” remarked Ziad Itani, head of TMT equity research coverage at Arqaam Capital.

STC stands to benefit substantially from the transaction, as the sale price of TAWAL exceeds its book value and revenues by five times. The influx of 8.7 billion riyals in cash will provide STC with opportunities to explore additional mergers and acquisitions, according to Itani.

The deal mirrors a trend of consolidation in the telecom tower sector within the region, with similar moves witnessed among other key players in December. STC CEO Olayan Mohammed Alwetaid views this transaction as a pivotal step in the group’s expansion, growth, and investment return optimization.

Moreover, STC and TAWAL have been actively pursuing acquisition and investment opportunities in foreign markets.

In December, STC Group emerged as the largest shareholder in Spain’s Telefonica, while TAWAL secured Islamic financing to fund the acquisition of a mobile telecommunications infrastructure unit in Bulgaria, Croatia, and Slovenia.