Saudi Telecom Giant Eyes European Expansion with Potential United Group Bid

Saudi Arabia's telecommunications leader, stc Group, is mulling a possible acquisition of United Group, a European telecom and pay-TV operator, according to industry insiders. This move signifies stc's ambition to expand its footprint in the European market.

The news comes as BC Partners, a UK-based private equity firm currently owning United Group, prepares to launch a potential sale process in the coming weeks. Sources familiar with the situation revealed that stc has begun preliminary groundwork for a potential transaction, although a formal offer is not guaranteed.

The acquisition, if successful, could value United Group at roughly €8 billion (US$8. 7 billion) including debt. This potential deal aligns with stc's recent strategic maneuvers towards European expansion. Last year, the company acquired a 4. 9% stake in Spanish telecom giant Telefónica, with the option to increase its holding to nearly 10%. Additionally, stc's subsidiary, TAWAL, acquired United Group's telecommunications tower assets in Bulgaria, Croatia, and Slovenia in 2023.

While BC Partners explores various options to maximize the sale's value, including a potential regional split, stc's interest in United Group presents a unique opportunity for the European company. A successful acquisition would bolster stc's presence in key European markets, offering access to a wider customer base and potentially leading to operational synergies.

Analysts suggest that the potential deal reflects the growing trend of international consolidation within the telecom industry. stc's interest in United Group highlights the attractiveness of European markets, particularly for cash-rich telecom operators from emerging economies.

The potential acquisition, however, faces its share of uncertainties. Regulatory hurdles and integration challenges are just a few of the factors that stc will need to navigate if it pursues a formal bid. Additionally, competition from other potential buyers could drive up the final price tag for United Group.

Despite the uncertainties, stc's interest in United Group underscores the Saudi Arabian telecom giant's ambitions to become a major player on the global stage. Whether or not a formal offer materializes and ultimately succeeds remains to be seen, but one thing is clear:stc is determined to expand its reach beyond its home turf.

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