Saudi Telecom Company (STC)the largest telecommunications company in Saudi Arabia, bought 9.9% of Telefónicaas reported The country. The percentage, which is equivalent to 2,100 million euros, makes the buyer a the largest shareholder of the Spanish company.
“The investment reflects STC Group’s confidence in Telefónica’s management team, its strategy and ability to create value”, mentions the organization led by José María Álvarez-Pallete, through a brief statement.
For its part, the Saudi group said: “This acquisition represents another important milestone in STC Group’s expansion and growth strategy, and reflects the group’s confidence in the sustainable growth and upward potential of Telefónica, which has a unique portfolio of infrastructure assets and state-of-the-art technology platforms, where it is developing activities in adjacent areas such as cognitive intelligence, edge computing and the Internet of Things.
According to Mohammed KA Al Faisal, Chairman of STC Group, his company shares many things in common with Telefónica:
“They have the same vision of using technology to connect people and developing a strategy to drive growth. This significant long-term investment by STC Group is aligned with our growth strategy, whereby we invest in sectors such as technology and digital infrastructure in markets we see as promising around the world.”
Mohammed KA Al Faisal.
STC does not intend to control Telefónica
Due to the concern that this type of acquisition could generate in the Spanish market, especially due to the abrupt and rapid expansion of Arabia towards different technological sectors, from the Saudi Telecom Company they clarify that they do not intend to take control of Telefónica. They also do not plan to acquire a majority stake in the future.
“As long-term shareholders, we support the company and are committed to developing and strengthening our strategic relationship. We have no intention of acquiring control or a majority stake in Telefónica. This is a great investment opportunity that allows us to use our strong balance sheet while maintaining our attractive dividend policy.”
Saudi Telecom Company.
The purchase was made as follows. Of the previously mentioned percentage, the Arabian company took over 4.9% of shares representing the share capital of Telefónica. The remaining 5% was acquiring financial instruments. It is worth mentioning that the voting right of Saudi Telecom Company only corresponds to that 5%not the entire investment.
Now, like any other purchase of similar dimensions, must first be approved by the Government of Spain. However, it is unlikely that any problem will arise that will prevent them from moving forward. The fact that the Saudi telecoms giant promises not to increase its stake in Telefónica is a crucial point to get a green light.