The Spanish government aims to acquire a stake of up to 10% in Telefonica
The Spanish government said it had already acquired a 6% stake in domestic telecom operator Telefonica through a state holding company.
Spanish state-run company Sociedad Estatal de Participaciones Industriales (SEPI) noted that the transaction is part of a move to acquire a stake of up to 10% in the operator. SEPI announced the purchase of its initial 3% stake in Telefonica around a month ago. The main aim of this move is Spain attempting to balance the influence of Saudi telco stc in the Spanish company.
“SEPI’s participation provides greater shareholder stability to the company to achieve its objectives and contributes to the protection of the strategic capabilities of a key company in the telecommunications sector and a determining factor in most of the industrial capabilities and areas of knowledge that affect the essential interests of defense and national security,” SEPI said in a statement.
In December 2023, Spain’s economic ministry had announced plans to acquire a stake in Telefonica. It is the first time that the Spanish government has purchased a stake in Telefonica since it was fully privatized in 1997.
In September, Saudi Telecom Company has purchased a 9.9% interest in Telefónica for €2.1 billion (currently $2.24 billion) to further its growth ambitions outside of Saudi Arabia. The stake, said the company, is comprised of 4.9% of Telefónica’s shares, as well as “financial instruments giving economic exposure to a further 5% of Telefónica’s share capital.”
STC said it plans to convert those instruments into shares but noted that it requires official approval to do so. Government authorization is needed for any foreign investor taking a stake of 5% or more in certain “strategic” defense companies, it explained, adding that Telefónica’s businesses related to national security and cyber defense puts it in that category.
The Saudi carrier has said it does not intend to “acquire control or a majority stake” in the Telefónica.
Following the acquisition by stc, the Spanish government said it would fully examine stc’s acquisition before giving any approval to the deal.
