The irruption, in May 2022, of the Emirati telecoms operator e& (ex-Etisalat) in the capital of its British counterpart Vodafone was not an isolated blow. On Wednesday, September 5, the Saudi operator STC announced that it had acquired a 9.9% stake in Telefonica, for a total amount of 2.1 billion euros, which makes it the largest shareholder of the Spanish incumbent operator. . e& owns 14.6% of Vodafone and already has a representative on its board of directors. The Emirati operator does not rule out raising up to 20% of the capital of the British.
In a statement sent to the Spanish stock exchange authorities, Telefonica said “take note of STC’s friendly approach and support to the management team”. STC has acquired with certainty 4.9% of the capital and voting rights of Telefonica and has economic interests in an additional 5%.
To obtain the voting rights corresponding to this 5%, he will have to obtain the authorization of the Spanish authorities, the activities of Telefonica being considered as defense infrastructures by the law on the control of foreign investments.
A new blueprint
“We do not intend to acquire control or a majority stake, but rather view this as an investment opportunity that allows us to utilize our strong balance sheet”, said in a press release Olayan Alwetaid, the general manager of STC. The acquisition comes as Telefonica chief executive Jose Maria Alvarez-Pallete works on the new strategic plan. This must be presented on November 8.
Entry into the capital of Telefonica “represents a new step in STC’s expansion and growth strategy”, continues the Saudi group. One of its subsidiaries, Tawal, paved the way in Europe in May by buying mobile telecommunications infrastructure in Bulgaria, Croatia and Slovenia.
In addition to its number one position in Spain, while waiting to see if the European Commission authorizes the marriage of its two local challengers Orange and Masmovil, Telefonica is also present in Germany, the United Kingdom (O2) and Brazil. The two groups know each other: in early 2023, Telefonica and STC signed a partnership to explore joint business opportunities in areas such as cybersecurity and the cloud.
A little cramped in their domestic markets, Gulf operators are seeking to reinvest their financial resources, supported by their state shareholders. STC is 64% controlled by Public Investment Fund, the Saudi sovereign wealth fund, while the Emirati investment fund, Emirates Investment Authority, owns 60% of e&.
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