The Spanish government has approved Saudi Telecom’s (STC Group) request to increase its stake in Telefonica from 5% to 9.97%, Economy Minister Carlos Cuerpo confirmed on Thursday. This decision follows an earlier report by El Pais newspaper and comes after an exhaustive analysis to ensure the national interest and telecommunications security.
Cuerpo stated that conditions have been set and accepted by STC to guarantee the operation’s compliance with Spanish legislation and national defense requirements. However, specific details of the conditions were not disclosed.
STC previously indicated its aim to build up a 9.9% interest in Telefonica, valued at around 2.4 billion euros ($2.53 billion). At the time, the Saudi group held a 4.9% stake in Telefonica, with additional financial instruments giving it an economic exposure equivalent to another 5% in the company.
Since Telefonica is considered a defense service provider, the Spanish government had to authorize any such stake increase. Initially, top government officials opposed the move, prompting the government to acquire a 10% stake in Telefonica through its state-owned holding company, SEPI.
Alongside STC’s stake increase, Spanish holding company Criteria, which controls Caixbank, also raised its stake in Telefonica to 9.99%. STC has maintained that it does not intend to gain control or a majority stake in Telefonica.
($1 = 0.9477 euros)
