This Thursday, the Government authorized the Saudi operator STC to reach 9.9% of Telefónica’s capital and become one of the main shareholders of the Spanish operator, as confirmed by the Minister of Economy, Commerce and Business, Carlos Body, in the press conference after the Council of Ministers. The operation comes more than a year after the Saudi landing was announced and after the reorganization of the company’s capital, with the entry of the State as the first shareholder.
Body has explained that “this authorization has been preceded by an exhaustive analysis by the Spanish authorities, in accordance not only with compliance with our current legislation, but also with the elemental nature of the law, as important as ensuring the national interest in matters of defense.”
STC invested 2.1 billion euros in September 2023 to surprise acquire 9.9% of Telefónica’s share capital. Initially it directly took 4.9% of the Spanish company and an additional 5% was guaranteed through financial instruments, pending approval from the Government. After the Government’s approval to reach that 9.9%, the Saudis will now have the right to appoint a representative on the operator’s board of directors.
According to current regulations on foreign investments and because Telefónica is considered a strategic company related to national security, the Government had to give its approval for a non-EU company to have more than 5% of the share capital in a Spanish company. of this type, by virtue of the so-called anti-takeover shield that was put in place during the pandemic to avoid hostile operations and that has been successively extended.
The landing of STC in Telefónica resulted in a series of movements in the shareholding of the telecom company chaired by José María Álvarez-Pallete. At the end of May, the State Society of Industrial Participations (SEPI), dependent on the Ministry of Finance, reached 10% of Telefónica’s share capital and completed the mandate of the Government transferred at the end of last year, after an investment of 2,285 million euros.
The board of directors of the operator unanimously agreed on May 8 to accept the “voluntary resignation” of Carmen García de Andrés from her position as director and to appoint by co-option Carlos Ocaña Orbis, who is now part of the highest decision-making body of the teleco on behalf of the SEPI.
The entry of STC into Telefónica’s shareholding also caused CriteriaCaixa, the holding company of the la Caixa Banking Foundation, to reach a 9.99% stake in Telefónica’s share capital at the end of last June. With this percentage, CriteriaCaixa almost reaches what the State has in telecom through SEPI, although the holding company has proposed reaching a maximum of 10.01%. These movements have been interpreted as a way of maintaining the Spanishness of Telefónica’s board of directors.
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