Telefonica Deal Tests Europe’s Appetite for Mideast Influence - Bloomberg
A Saudi Arabian state-backed telecom firm is set to splash out $2.5 billion to become the biggest shareholder in Spain’s Telefonica SA, marking the latest instance of Middle Eastern wealth flowing into key European communication assets.
The move by Saudi Telecom Co. will likely draw scrutiny from the Spanish government, which views Telefonica as a company of strategic importance. If it goes through, that would mean two of the biggest European telecom firms will count state-backed Gulf companies as their top shareholders.
The move comes a year after Abu Dhabi’s Emirates Telecommunications Group emerged as Vodafone Group Plc’s biggest shareholder. The UAE firm has been mandated by the government, its main shareholder, to seek opportunistic deals and this year agreed to pay 2.15 billion euros ($2.3 billion) for a controlling stake in PPF Telecom Group’s service and infrastructure assets in Eastern Europe.
STC and Emirates Telecom are among government-backed firms that Gulf states are increasingly empowering to do deals internationally, in sectors ranging from sports to computer games and mining to healthcare.
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