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Western Union, global money transfer firm, has acquired a 15 percent stake in the digital payment unit of stc for $200 million.

The acquisition of stc Pay, which values the company at 5 billion Riyals ($1.3 billion) will finance its capital and long-term expansion, Saudi Arabia’s largest telecom company said in a statement.

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.

stc Pay, a wholly-owned subsidiary of stc, is a financial company that launched a digital wallet mobile application in 2018. The e-platform provides digital and financial services to individuals and companies, and facilitates financial transactions and payments. 

Western Union and stc Pay first entered strategic discussions in 2018 to embed Western Union’s cross-border and cross-currency functionality into the stc Pay platform.

The acquisition will have a positive impact on stc Pay in the short-and-long term on the operational and financial levels. 

The agreement was signed under the supervision of Ahmed Alkholifey, Governor of the Saudi Arabian Monetary Authority (SAMA). 

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