Spain vows to defend ‘strategic interests’ as stc looks to buy into Telefónica

The Spanish government is likely to probe Saudi telco stc’s plan to take a 9.9% stake in Telefónica, valued at around €2.1 billon, according to reports.

The Saudi group, backed by the country’s sovereign wealth fund, informed Telefónica and the Spanish government about its intentions just before news of the bid became public on Tuesday.

If the acquisition went ahead, stc would be the biggest investor in the national telco, ahead of Caixabank and BBVA.

Spanish deputy prime miinster Nadia Calviño noted that the government’s approval would be needed and said that the country would keep its “strategic interests” in mind when taking a decision.

Stc’s €2.1 billion investment in the telco was described by the Saudi outfit as “another milestone in stc Group’s expansion and growth strategy”

The group cited Telefónica’s portfolio of infrastructure assets and technology platforms, where it is developing state-of-the-art capabilities in areas such as cognitive intelligence, edge computing and IoT, as reasons for its move.

Stc CEO Olayan Alwetaid said: “Our investment in Telefónica demonstrates our confidence in Telefónica’s leadership, its strategy and its ability to create value. As long-term, supportive shareholders, we are committed to strengthening our partnership. We do not intend to acquire control or a majority stake but rather we see this as a compelling investment opportunity to use our strong balance sheet whilst maintaining our dividend policy.”