Saudi Telecom Company (STC) is making headlines with its ambitious plan to acquire a 9.9% stake in Telefonica SA, valued at $2.5 billion. This move has stirred up controversy in Spain, primarily due to concerns about the potential conditions that the Spanish government might impose on the deal.
There’s a possibility that the terms of this acquisition could resemble those applied to IFM Global Infrastructure’s previous acquisition of Naturgy Energy Group SA. These terms included imposing restrictions on asset sales and dividends. This aligns with Spain’s policy of safeguarding its interests in strategically significant companies like Telefonica and Indra Sistemas SA, which are subject to a 10% stake rule.
This strategic investment by STC follows a trend where government-backed Gulf companies have shown interest in European telecoms. A well-known instance is when Emirates Telecommunications Group became the largest shareholder of Vodafone Group Plc.
However, despite the buzz and controversy surrounding this significant deal, the Spanish government seems to have limited information about it. This was confirmed by Economy Minister Nadia Calvino, who stated on Tuesday that they were not yet fully informed about the details of the acquisition.