Global site navigation

Spain takes stake in Telefonica after Saudi deal concerns
Economy

Spain takes stake in Telefonica after Saudi deal concerns

by  AFP 2 min read
Saudi Telecom announced in September it had paid 2.1 billion euros ($2.3 billion) for a 9.9 percent share in Telefonica, causing concern in Madrid.
Saudi Telecom announced in September it had paid 2.1 billion euros ($2.3 billion) for a 9.9 percent share in Telefonica, causing concern in Madrid.. Photo: JAVIER SORIANO / AFP/File
Source: AFP

PAY ATTENTION: We are on WhatsApp! Get trending news in your favourite app - FOLLOW NOW!

Spain's government has acquired a three-percent stake in telecoms giant Telefonica following concerns over a Saudi firm taking a piece of a company that Madrid considers strategically important.

Spanish state-owned holding company SEPI said in a filing with the stock market regulator late Monday that the move was "in line with a cabinet decision in December" to acquire 10 percent of Telefonica's share capital.

At the time, the government of Socialist Prime Minister Pedro Sanchez said it was to safeguard the firm's "strategic capacities and essential importance" to Spain.

It is the first time that the Spanish government has taken a stake in Telefonica since it was fully privatised in 1997.

In September, Saudi Telecom (STC) said it had paid 2.1 billion euros ($2.3 billion) for a 9.9 percent share in Telefonica, causing concern in Madrid, which only learned of the transaction at the last minute.

Read also

Sri Lanka cuts key interest rates, seeks China deal

Had it been over the 10 percent threshold, the deal would have required government approval.

PAY ATTENTION: Watch the hottest celebrity stories on our YouTube channel 'Briefly TV'. Subscribe now!

STC, which is majority-owned by Saudi's PIF sovereign wealth fund, insisted at the time it did "not intend to acquire control or a majority stake" in Telefonica, which has a strong presence in Latin America and Britain.

Spain's government said the move to acquire a stake in Telefonica was in line with its European neighbours, which also own small minority stakes in their leading telecoms operators.

The return of the state as one of Telefonica's shareholders comes as the company is in the process of cutting 3,400 jobs by 2026 in Spain, about one fifth of a total workforce of 16,500, as it tries to boost its profitability.

The company currently has a global workforce of over 100,000 people.

Read also

Zara owner Inditex workers protest after record profits

With Telefonica weighed down by a heavy debt load, the sharp jump in interest rates this past year has caused concern about its finances.

hmw/CHZ/lth

PAY ATTENTION: Follow Briefly News on Twitter and never miss the hottest topics! Find us at @brieflyza!

Source: AFP

Authors:
AFP avatar

AFP AFP text, photo, graphic, audio or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP news material may not be stored in whole or in part in a computer or otherwise except for personal and non-commercial use. AFP will not be held liable for any delays, inaccuracies, errors or omissions in any AFP news material or in transmission or delivery of all or any part thereof or for any damages whatsoever. As a newswire service, AFP does not obtain releases from subjects, individuals, groups or entities contained in its photographs, videos, graphics or quoted in its texts. Further, no clearance is obtained from the owners of any trademarks or copyrighted materials whose marks and materials are included in AFP material. Therefore you will be solely responsible for obtaining any and all necessary releases from whatever individuals and/or entities necessary for any uses of AFP material.

Hot: