Saudi Telecom Group becomes top shareholder in Telefónica with 9.9% stake

STC, listed on the Saudi Stock Exchange with a market capitalization of $52.21 billion, is recognized as a digital leader in the Middle East. Telefónica has disclosed the specifics of the transaction to the National Securities Market Commission in Spain.

The acquisition comprises a two-fold process where STC obtains shares representing 4.9% of Telefónica’s share capital. The company will acquire the remaining 5% through the purchase of financial instruments.

That said, Olayan Alwetaid, STC’s CEO, states that the company has no plans to seek a controlling or majority stake in Telefónica. Alwetaid further elaborates that the investment allows STC to leverage its strong financial position while maintaining its dividend policy.

STC will gain the voting rights corresponding to the 5% in financial instruments after receiving necessary regulatory approvals. The group says its investment underscores its trust in Telefónica’s management and strategic approach and its potential for value creation.

STC says it uses IoT, cloud computing and cybersecurity technologies to drive its business. Meanwhile, Telefónica offers fixed and mobile connectivity and diverse digital services for residential and business customers.

Telefónica serves over 383 million customers across Europe and Latin America.

Earlier this year, STC entered into a strategic partnership with Telefónica. The agreement allowed STC to join the Telefónica Partners Program and collaborate on potential business opportunities in B2B & B2C, digital services, innovation and procurement. According to the companies, the partnership aims to promote growth, capture synergies and facilitate the sharing of knowledge on various topics.

Article Topics

STC  |  telecommunication  |  Telefonica