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| Western Union buys 15% off Stc Pay |
Western Union, the world's largest money transfer company, acquired a 15% stake in Stc Pay, the digital payments arm of Saudi Arabia’s STC Group, for $ 200 million (Saudi Arabia 750 million).
The major Saudi Telecom Company said in a statement: The acquisition of the digital payments entity, Stc Pay, is estimated at 5 billion riyals ($ 1.3 billion), and will finance its capital and support long-term expansion plans.
Mohammed bin Khalid Abdullah Al-Faisal, Chairman of the Saudi Telecom Group, said: This investment reflects the company's position in digital licensing.
He added that the deal resulted in the establishment of the first Saudi company (Unicorn) and the first (Unicorn) financial technology company in the Middle East.
The Unicorn is often referred to as private companies valued at $ 1 billion or more.
Sources told Reuters last month that STC had commissioned banks to arrange the first sale of shares in Solutions, the product and service development arm of STC.
Reducing dependence on cash is part of the Saudi government's efforts to modernize the economy of the world's largest oil exporter.
STC said: The Stc Pay division is the Saudi Monetary Agency, the first financial technology company licensed by the Saudi Central Bank, with more than 4.5 million users.
The completion of the transaction is subject to all regulatory approvals from the competent authorities. Upon completion of the deal, Western Union will pay $ 133.3 million (500 million riyals) to buy a 10% stake in the Stc Pay division.
If the Stc Pay industry was subsequently licensed to provide digital banking services, Western Union would pay $ 66.67 million (Rial 250 million), bringing Western Union's share in the Stc Pay industry to 15%.
Stc intends to pump another 400 million riyals. At the end of the deal, the capital of the subsidiary Stc Pay will increase to 1.45 billion riyals.
When Stc is licensed to provide digital banking services, Stc will also bring in capital of 802 million riyals to Stc Pay affiliates.