The first shareholder of Telefónica will be, from now on, a Saudi. The former state monopoly will have STC Group as its main investor, which has acquired a 9.9% stake for a total amount of 2,100 million euros, as reported by the Arab group in a statement and the Spanish teleco in a statement to the National Stock Market Commission. The investor is owned by the Saudi State itself and represents one of the largest investments of that country in Spain.
The acquisition of this package, with which it surpasses other shareholders such as Blackrock, BBVA and CaixaBank, is carried out in two steps. It acquires 4.9% directly. The remaining 5% is done through the acquisition of financial derivatives on shares that will ultimately be converted into company titles.
The operation comes after years of attempts by the company to increase the value of the share without being able to reach the levels of yesteryear. In the last five years, more than 44% of its capitalization has been left on the stock market, dragged down by the problems it shares with the rest of the telecommunications sector and with a debt that it has been reducing through divestments.
The acquisition of the Saudi company of this package in Telefónica comes at a time when the limits for the acquisition of Spanish companies by foreign investors that were approved during the pandemic are still in force. The Arab company acquires 4.9%, just below the 5% imposed by law from which a foreign investor entering a company with interests in Defense, such as Telefónica, would have to request permission from the Government. In addition, with that 9.9% that it would reach with derivatives, it is also just below the 10% imposed by the anti-takeover shield.
From the company they have clarified that they have no intention of acquiring control or a majority stake in Telefónica. “This is a great investment opportunity that allows us to use our solid balance sheet and at the same time maintain our attractive dividend policy,” they pointed out. Telefónica, like other European telecommunications companies, has been talked about for a long time as ‘opable’ due to its low stock market value.
In addition, as the Saudi group has highlighted, this acquisition represents “another important milestone” in its expansion and growth strategy, and reflects confidence in Telefónica’s sustainable growth and upward potential.
As part of its growth strategy, STC has made a series of investments in the information, communication and technology sector, both in Saudi Arabia and abroad, the most recent being the acquisition by its subsidiary Tawal of the assets of United Group telecommunication towers in Bulgaria, Croatia and Slovenia.
The president of STC Group, Mohammed KA Al Faisal, has commented that his company shares many similarities with Telefónica. “This important long-term investment by STC Group is aligned with our growth strategy, according to which we invest in sectors such as technology and digital infrastructure in markets that we consider promising around the world,” he said.
The relationship between Telefónica and STC Group is not new. In February of this year both companies announced a collaboration agreement “to work together and benefit from their joint scale, the combined experience of both companies and their presence in the market”. This agreement included “exploring potential joint business opportunities in areas such as B2B & B2C, Digital Services (including cybersecurity, cloud, IoT and Big Data), Technology, Innovation, Purchasing and other strategic areas to drive growth and capture synergies”, according to reported in a joint statement.