Spain is to buy a stake of up to 10 per cent in Telefónica in a bold response to a move by Saudi Arabia’s STC Group to acquire 9.9 per cent of the telecommunications company.
Spain’s decision raises the intensity of a battle for influence at Telefónica, a national champion with businesses in security and defence. It has been targeted by STC — majority-owned by Riyadh’s sovereign wealth fund — as the Saudi group seeks to expand its investments in Europe.
The Spanish cabinet issued the order for the stake to be acquired with the aim of giving Telefónica “shareholding stability”, according to a filing made by the government holding company that will buy the shares. The stake would be worth about €2.1bn at today’s valuation.
Nadia Calviño, Spain’s outgoing deputy prime minister, said on Tuesday that the move 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”. She did not comment on STC.
Spain’s move came more than three months after STC shocked the Spanish establishment by announcing that it had spent €2.1bn in acquiring a 4.9 per cent stake in Telefónica and derivatives that gave it an economic interest in a further 5 per cent.
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