Western Union Buys Stake in Saudi Telecom's Digital Payment Unit for $200m

Western Union, the world’s largest money transfer firm, has acquired a 15% stake in the digital payment unit of Saudi Arabia’s STC Group for $200 million.

The acquisition of stc pay, which values the company at 5 billion riyals ($1.3 billion), will finance its capital and support long-term expansion plans, Saudi Arabia’s largest telecoms operator said in a statement on Saturday.

STC Group chairman Mohammed bin Khalid Abdullah Al Faisal said the investment reflected the company’s position as a “digital enabler”. He said the deal created the first “Saudi unicorn and the first fintech unicorn in the Middle East”.

Unicorns are generally defined as private companies valued at $1 billion or more, Reuters reported.

Upon completion of the deal, STC said Western Union will pay $133.3 million for a 10 percent stake in STC Pay. If STC Pay obtains a digital banking license, the buyer then pays another $66.67 million, increasing its equity stake to 15 percent.

STC said its stc pay unit is the first licensed fintech company by the Saudi Arabian Monetary Authority, the Saudi central bank, and has more than 4.5 million users.

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