News
At the current market value, the stake is estimated to be worth €2 billion
The Spanish government is set to acquire a 10% stake in Telefónica through the state holding company Sociedad Estatal de Participaciones Industriales (SEP)I, following Saudi Arabia based STC group’s acquisition of a large stake earlier this year.
Back in September, STC group acquired a 9.9% stake in Telefonica which was worth €2.1 billion, then becoming the company’s largest shareholder. The deal includes the acquisition of 4.9% of Telefonica’s shares, with the remaining 5% stake derived from various financial instruments. However, a stake of this size is subject to government approval, which is expected to happen early next year.
At the time, STC confirmed that they do not intend to acquire a majority stake in Telefónica, but instead see the move as a “compelling investment opportunity to use our strong balance sheet whilst maintaining our dividend policy,” according to a statement by STC CEO Olayan Alwetaid.
Spain’s ministry of economy, commerce and business stated that the acquisition would give “stability to the company and the development of its plans in our country.”
Yesterday, Spain’s deputy Prime Minister Nadia Calviño said that the purchase was “in line with other large European countries, such as France and Germany, which have and are increasing their shareholdings in big and strategic telecommunications operators”.
Indeed, the move represents a partial renationalisation of the Telefónica, which has been a fully private company since 1997.
Upon the news, Telefónica shares were up 3.6%.
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