The Saudi telco initially acquired a 4.9% stake in Telefonica over a year ago
The Spanish Council of Ministers has conditionally authorized Saudi telecommunications operator STC to raise its stake in Spanish operator Telefónica from current 4.9% to 9.97%, as announced by Economy Minister Carlos Cuerpo.
The decision follows STC’s declaration of intent to expand its investment in Telefónica, which operates in sensitive sectors like national defense and critical infrastructure, necessitating government authorization.
The Saudi telco initially acquired a 4.9% stake in Telefónica over a year ago, along with financial instruments representing an additional 5%. To reach the authorized 9.97% ownership in Telefonica, STC will need to convert these instruments into shares.
At a press conference following the decision, Cuerpo noted that the approval is contingent upon undisclosed conditions designed to safeguard Telefónica’s strategic autonomy, protect national interests and ensure the security of critical infrastructure. The Saudi operator has voluntarily accepted these terms, the minister said.
The Spanish state, through state-run company Sociedad Estatal de Participaciones Industriales (SEPI), remains Telefónica’s largest shareholder with a 10% stake, followed by Criteria Caixa (9.9%), BBVA (4.93%) and BlackRock (4.656%). When asked about the possibility of SEPI increasing its stake in Telefónica, the minister said it was too early to discuss such a move, but he emphasized Telefónica’s strong position for continued investments in strategic sectors and regions like the Middle East.
Cuerpo highlighted that the review process leading to this decision involved a detailed analysis to ensure a full compliance with legislation regarding national defense and telecommunications infrastructure.
The minister further remarked that Telefónica is well-positioned to enhance its geographic presence and adopt advanced technologies, benefiting from its diverse network of partners and investors.
In a press release, STC has indicated that this increased stake gives the telco the right to appoint a representative to Telefónica’s Board of Directors. However, the Saudi carrier has not specified whether it will exercise the option.
The Saudi carrier had previously said it does not intend to “acquire control or a majority stake” in Telefónica.
In March, the Spanish government had acquired a 3% stake in Telefonica through SEPI, with the main aim of attempting to balance the influence of Saudi telco stc in the telco.
