This Thursday, the government authorized the Saudi operator STC to reach 9.9% of the capital of Telefónica and to become one of the main shareholders of the Spanish operator, as confirmed by the Minister of Economy, Commerce and Business, Carlos Body, during the press conference after the Council of Ministers. The operation comes more than a year after the announcement of the Saudi landing and after the reorganization of the company’s capital, with the entry of the State as the first shareholder.
Body explained that “this authorization was preceded by an exhaustive analysis by the Spanish authorities, in accordance not only with compliance with our current legislation, but also with the elementary nature of the law, as important as guaranteeing the national interest in matters of defense.”
STC invested 2.1 billion euros in September 2023 to surprisely acquire 9.9% of the capital of Telefónica. Initially, it directly took 4.9% of the Spanish company and a further 5% was guaranteed by financial instruments, pending government approval. After government approval to reach this 9.9%, the Saudis will now have the right to appoint a representative to the operator’s board of directors.
In accordance with current regulations on foreign investments and because Telefónica is considered a strategic company linked to national security, the government had to agree for a non-European company to hold more than 5% of the capital of a Spanish company. type, under the so-called anti-takeover shield which was put in place during the pandemic to avoid hostile operations and which was successively extended.
The arrival of STC in Telefónica led to a series of movements in the shareholding of the telecommunications company chaired by José María Álvarez-Pallete. At the end of May, the National Company of Industrial Participations (SEPI), dependent on the Ministry of Finance, reached 10% of the share capital of Telefónica and completed the mandate of the Government transferred at the end of last year, after an investment of 2.285 million euros.
The operator’s board of directors unanimously agreed on May 8 to accept the “voluntary resignation” of Carmen García de Andrés from her position as director and to appoint by co-optation Carlos Ocaña Orbis, who is now part of the highest decision-making bodies. teleco organ on behalf of SEPI.
The entry of STC into the shareholding of Telefónica also led CriteriaCaixa, the holding company of the La Caixa Banking Foundation, to reach, at the end of last June, a stake of 9.99% in the capital of Telefónica. With this percentage, CriteriaCaixa almost reaches what the State owns in telecommunications through SEPI, although the holding company has proposed reaching a maximum of 10.01%. These moves were interpreted as a way of maintaining the Spanishness of Telefónica’s board of directors.
