Vodafone, Etisalat Deepen Strategic Relationship as e& CEO Joins Vodafone Board

(MENAFN) Vodafone Group announced on Thursday that the CEO of its largest shareholder, Emirates telecoms group Etisalat (e&), Hatem Dowidar, would join its board as the two companies agreed to deepen their strategic relationship. Vodafone said Dowidar would stay on its board for as long as e& maintained its current 14.6 percent stake and it would be able to nominate a second non-executive director if its shareholding exceeded 20 percent. The British company has said it is open to increasing its stake in Vodafone.

Vodafone's CEO Margherita Della Valle, who was appointed to the position permanently last month, said closer alignment with e& would benefit both companies and bring additional telecoms experience to Vodafone's board. The groups said they could offer joint cross-border digital services and solutions to multi-nationals and public sector organizations, consider joint procurement, form closer roaming agreements, and work together in technology.

E&, which has operations in 16 countries across the Middle East, Asia, and Africa, has built up its stake in Vodafone since an initial investment in May 2022. It has been joined on the shareholder register by French telecoms billionaire Xavier Niel, who competes with Vodafone in Italy, and more recently by Liberty Global, Vodafone's partner in the Netherlands.

With an underperforming share price, Della Valle is under pressure to shake up the group, which has operations across Europe and Africa, and drive the consolidation it has said is needed in major markets like Britain and Italy. Analysts have said all three of Vodafone's telecoms industry shareholders could stand to benefit from changes to the company's footprint.

The closer alignment between Vodafone and e& comes as the two companies agreed to deepen their strategic relationship. Vodafone's willingness to allow e& to nominate a second non-executive director if its shareholding exceeds 20 percent suggests that the British company is open to increasing its stake in the telecoms group. Meanwhile, e& CEO Hatem Dowidar's appointment to Vodafone's board brings additional telecoms experience to the company. The two groups plan to offer joint cross-border digital services and solutions, consider joint procurement, form closer roaming agreements, and work together in technology.

E&, which has operations in 16 countries across the Middle East, Asia, and Africa, has been steadily building up its stake in Vodafone since May 2022. It has been joined on the shareholder register by French telecoms billionaire Xavier Niel and more recently by Liberty Global, Vodafone's partner in the Netherlands. With Vodafone's share price underperforming, CEO Margherita Della Valle is under pressure to drive consolidation in major markets like Britain and Italy. Analysts have suggested that all three of Vodafone's telecoms industry shareholders stand to benefit from changes to the company's footprint. Despite the announcement of the closer alignment between Vodafone and e&, shares in Vodafone were trading down 0.5 percent in early deals on Thursday.

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