Spanish government acquires large stake in Telefónica to counter effect of Saudi telecom

5/21/2024 4:18:32 AM

(MENAFN) The Spanish government has acquired a ten percent stake in the major telecommunications company Telefonica. This move, initiated in December, was aimed at countering the Acquisition of a similar stake by the Saudi Telecom Company (STC). The state-owned holding company SEPI (Sociedad Estatal de Participaciones Industriales) announced the completion of the purchase, having acquired over 567 million shares in Telefonica at an average price of 4.0295 euros (USD4.38) per share, amounting to a total expenditure of approximately 2.3 billion euros.

SEPI's acquisition process, mandated by the Spanish Cabinet, was concluded to stabilize Telefonica's shareholder structure and safeguard its strategic capabilities. Telefonica, a key player in the telecom sector and a provider of defense services, was considered vital to national interests. The Spanish government emphasized that SEPI's involvement would enhance the stability of Telefonica’s shareholders, ensuring that the company remains resilient and capable of maintaining its strategic operations.

This strategic acquisition follows Saudi Telecom Company's purchase of a 9.9 percent stake in Telefonica for 2.1 billion euros in September. STC's stake includes 4.9 percent of Telefonica shares and financial instruments equivalent to an additional five percent. In response to this foreign investment, the Spanish government, after reaching a seven percent stake in Telefonica by May 8, requested a seat on the company's board of directors. They proposed Carlos Ocaña, a former official of the Ministry of Industry, to represent government interests, thereby ensuring closer oversight and influence over Telefonica's future direction and strategic decisions.

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