The Spanish government says the move is not a risk to the country’s national security [Getty]
The Spanish government has approved Saudi Arabia’s STC Group to increase its stake in Telefónica to 9.97 percent, following a year-long process of negotiations and regulatory scrutiny.
On Thursday, Spain’s Economy Minister Carlos Cuerpo confirmed that the Council of Ministers had authorised the move, allowing STC to raise its voting rights from 4.97 percent and appoint a representative to Telefónica’s board.
The decision came after a battle for influence in Telefónica, a company deeply embedded in Spain’s national security and telecoms infrastructure.
STC, majority-owned by Saudi Arabia’s sovereign wealth fund, has been attracted to the Spanish company due to the strategic nature of its operations, which include involvement in defence.
But Cuerpo insisted that the approval followed “an exhaustive analysis” by Spanish authorities, addressing national security concerns related to telecoms infrastructure, as well as safeguarding Telefónica’s operational autonomy.
STC CEO Olayan Al-Wetaid welcomed the decision, framing the approval as a reflection of STC’s position as a “long-term strategic partner” to Telefónica.
“As one of the company’s largest shareholders, we remain confident in Telefónica’s leadership and strategic outlook, and we look forward to working together to unlock value for all shareholders,” he added.
Telefónica CEO José María Álvarez-Pallete López acknowledged the approval but noted that STC had not introduced new developments since announcing its stake last year.
“One of Telefónica’s great strengths is its shareholders, large and small, who provide stability and support to the operator and reflect the confidence of investors in Telefónica’s strategy,” he said.
In response to STC’s acquisition, Spain’s government increased its own stake in Telefónica through the Sociedad Estatal de Participaciones Industriales (SEPI), which now holds a 10 percent share.
Although Minister Cuerpo declined to speculate on whether Spain would increase its stake further, he indicated that the approval process had been carefully managed to protect national interests.
Shares in Telefónica rose 1 percent following the announcement.
