Saudi Arabia’s stc Group (STC) headquartered in Riyadh, Saudi Arabia, has acquired a 9.9 percent stake in Spain’s Telefónica (NYSE: TEF), worth approximately $2.25 billion, and becomes the Spanish telco’s largest shareholder, according to Investing.com.
For its part, STC says it has no intention of securing controlling interest or a majority stake in Telefónica rather seeing the move as “a compelling investment opportunity,” Broadband TV News reported. It was noted that any foreign investment above 10 percent in Telefónica would require the approval of Spain’s Council of Ministers. That could be a sticking point. “Telefónica is a strategic company for our country and as a government, we will apply all the mechanisms that are necessary to prioritize the defense of our strategic interests,” stated Nadia Calvino, Spain’s acting economy minister.
STC is Saudi Arabia’s largest telecom operator and the largest telecom firm in the Middle East, according to Inside Towers Intelligence. The company is 64 percent owned by Saudi Arabia’s Public Investment Fund, the main financial engine of Crown Prince Mohammed bin Salman’s Vision 2030 program to wean the country’s economy off its dependence on oil.
STC says that its growth strategy has resulted in a number of investments in the Information, Communication and Technology sector inside Saudi Arabia and globally. Recently, Tawal, a STC subsidiary, acquired United Group’s telecommunications tower assets in Bulgaria, Croatia, and Slovenia, Inside Towers reported.
Earlier this year, STC and Telefónica established a partnership to explore joint business opportunities in areas including cybersecurity and cloud services, Investing.com reported.
Outside of Spain, Telefónica operates in key markets including the U.K., Germany, and major Latin American countries. The operator has been shifting towards expanding technology services for clients along with investments in telecom infrastructure.
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