SEPI said it spent nearly $2.5 billlion to acquire more than 567 million shares in Telefonica
The Spanish government said it has acquired a 10% stake in domestic telecom operator Telefonica through a state holding company.
Spanish state-run company Sociedad Estatal de Participaciones Industriales (SEPI) had announced the purchase of its initial 3% stake in Telefonica around the end of March while at the end of April, SEPI announced it already had a 6% stake. The main aim of this move if for Spain to better balance the influence of Saudi telco stc in the Spanish company.
In a release, SEPI said it has acquired more than 567 million shares, spending around €2.3 billion ($2.49 billion). The state company told stock market regulator CNMV the 10% buy “ends the carrying out of the purchase operations ordered by the cabinet”.
“Telefónica is one of the main companies in the country, a leader in the telecommunications sector and key in other strategic areas. The company is decisive due to its industrial capabilities and areas of knowledge, since it develops activities relevant to the economy and the productive fabric, including those related to security and defense,” SEPI said.
“SEPI’s participation provides greater shareholder stability to the company to achieve its objectives and contributes to the protection of its strategic capabilities,” it added.
In December 2023, Spain’s economic ministry had announced plans to acquire a stake in Telefonica. It is the first time that the Spanish government has purchased a stake in Telefonica since it was fully privatized in 1997.
In September, Saudi Telecom Company has purchased a 9.9% interest in Telefónica for €2.1 billion to further its growth ambitions outside of Saudi Arabia. The stake, said the company, is comprised of 4.9% of Telefónica’s shares, as well as “financial instruments giving economic exposure to a further 5% of Telefónica’s share capital.”
STC said it plans to convert those instruments into shares but noted that it requires official approval to do so. Government authorization is needed for any foreign investor taking a stake of 5% or more in certain “strategic” defense companies, it explained, adding that Telefónica’s businesses related to national security and cyber defense puts it in that category.
The Saudi carrier has said it does not intend to “acquire control or a majority stake” in Telefónica.
Following the acquisition by stc, the Spanish government said it would fully examine stc’s acquisition before giving any approval to the deal.
