By Anirban Sen, Supantha Mukherjee and Alexandra Alper
NEW YORK (Reuters) – Saudi Aramco The digital arm of (TADAWUL:) is in talks to take a significant minority stake in Mavenir, in a deal that is likely to value the US telecommunications software maker at around $3 billion, people familiar with the matter told Reuters on Friday.
Aramco Digital is in talks to invest about $1 billion in Mavenir and a deal is likely to be signed before the end of the year, the sources said, cautioning that a transaction is not guaranteed.
Mavenir is working with investment bank Evercore on the talks with Aramco Digital, the sources said, requesting anonymity because the talks are confidential.
The deal by Aramco Digital, the oil giant’s wholly owned technology subsidiary, would be the first major transaction in the telecommunications industry as part of Saudi Arabia’s Vision 2030 plan, which focuses on technological advancements and economic diversification.
Aramco and Evercore did not immediately respond to requests for comment. Mavenir declined to comment.
The telecom equipment industry, long dominated by suppliers such as Sweden’s Ericsson (BS:), Finland’s Nokia (HE:) and China’s Huawei, is one of the few critical areas where U.S. companies do not have a significant presence.
Richardson, Texas-based Mavenir is pioneering a technology called Open Radio Access Network (Open RAN) that promises to radically reduce costs for telecom operators building a mobile network. It uses cloud-based software and allows the use of equipment from many vendors rather than relying on a handful of companies.
The company has raised at least $800 million in several funding rounds to date.
While the Trump administration took actions to thwart Huawei’s U.S. operations, it also pushed for greater adoption of Open RAN technologies, which could bring more U.S. companies into the mix.
The push to promote Open RAN continued under the Biden administration, but was not widely adopted because the emerging technology could not always match all the features that traditional telecom vendors could offer.
Last year, AT&T (NYSE:) signed a $14 billion Open RAN deal with Ericsson for 70% of its wireless network traffic by the end of 2026, reinvigorating the sector. Sources said the new Trump administration may also prioritize developing the technology.
US-SAUDI TIES
While a deal between Aramco and Mavenir will likely face a U.S. national security review, the Biden administration signed a deal with the Saudis in 2022 to collaborate on the technology to build 5G and 6G networks in Saudi Arabia.
As part of the deal with Mavenir, Aramco Digital is in talks to separately invest $200 million in a joint venture with the company for technology development in the region.
Aramco Digital announced in January its intention to build Saudi Arabia’s first Open RAN development center in partnership with Intel (NASDAQ:), which has worked with telecom companies such as Vodafone (NASDAQ:) and Reliance Jio to develop the technology. Aramco Digital last week received a license to provide wireless services in Saudi Arabia.
A cash injection from the Saudis would allow Mavenir to upgrade its 5G technology and better prepare for the rollout of the 6G network in the second half of the decade, at a time when the entire telecom sector is experiencing a recession.
