(Western Union) Western Union, the world’s largest money transfer company, acquired a 15 percent stake in Saudi STC Group’s digital payment unit, Stc Pay, for $ 200 million (750 million Saudi riyals).
A major Saudi Telecom company said in a statement: The acquisition of the digital payment unit Stc Pay, estimated at 5 billion expenses ($ 1.3 billion), will fund its capital and support long-term expansion plans.
Chairman of Saudi Telecom Group’s Board of Directors, Mohammed bin Khalid Abdullah Al-Faisal, said: The investment reflects the company’s position as a digital enabler.
He added that the deal established the first Saudi company (Unicorn) and the first company (Unicorn) for financial technology in the Middle East.
Unicorn are generally known as private companies worth $ 1 billion or more.
Sources told Reuters last month that Saudi Telecom Company had commissioned banks to arrange a potential initial sale of shares in its product and service development arm, solutions from STC.
Reducing dependence on cash is part of the Saudi government’s efforts to modernize the world’s largest oil exporter economy.
Saudi Telecom Company said: Stc Pay Unit is the first financial technology company licensed by the Saudi Arabian Financial Agency, Saudi Central Bank, and has more than 4.5 million users.
Completion of the transaction is subject to obtaining all regulatory approvals from the relevant authorities, and upon completion of the transaction, Western Union pays $ 133.3 million (500 million Saudi riyals) for a 10 percent stake in the unit Stc Pay.
Western Union pays the amount of $ 66.67 million (SAR 250 million) later, if a Stc Pay unit gets a digital banking services license, and Western Union’s share of Western Union goes up to 15 percent in the Stc unit Pay.
Stc is supposed to inject an additional 400 million Saudi riyals into capital, raising Stc Pay’s unit capital to 1.45 billion Saudi riyals after the transaction is completed.
Stc is also injecting an additional SAR 802 million into the capital of the Stc Pay unit if it receives a digital banking services license.