U.K.-based Vodafone Group has announced that the Emirates Investment Authority (EIA), which operates under the e& brand, has increased its stake in the telecommunications company to 15.01%. According to a recent filing, EIA now holds approximately 3.94 billion voting rights in Vodafone, a rise from its previous shareholding of 14.006%.
The increase in voting rights corresponds to a value of around £3 billion ($3.94 billion), based on Vodafone’s share price of 75.62 pence at the close of trading on Monday. This move is part of a broader strategic partnership between Vodafone and e&.
In May, Vodafone and e& announced that e&—60% owned by the UAE government—had increased its stake to 14.6%. Initially, the Arab telco invested £3 billion in Vodafone back in 2022, and under the terms of the strategic partnership, e& has the option to further increase its stake to just under 25%.
As part of this partnership, the CEO of e& secured a position on Vodafone’s board, subject to regulatory approval. Additionally, e& has the opportunity to appoint an independent non-executive director if its ownership exceeds 20%.
However, the growing stake of e& in Vodafone has raised national security concerns in the U.K. The British government, specifically the Cabinet Office, has warned that the involvement of e& poses potential risks due to Vodafone’s strategic importance in the country’s telecommunications infrastructure and its role in cybersecurity and government services.
To mitigate these concerns, the U.K. government has required Vodafone to set up a national security committee that will oversee and monitor any sensitive work the company undertakes. This measure is seen as necessary to ensure that national security is not compromised.
Additionally, the Cabinet Office has stated that e&’s influence could “materially impact” policy decisions within Vodafone. Oliver Dowden, the secretary of state at the Cabinet Office, has issued several directives, including a requirement that any changes to the relationship between Vodafone and e& be reported to the U.K. government.
