Saudi Arabia has promised to “cooperate” with Telefónica in addressing the government’s concerns

Saudi Arabia has promised to “cooperate” with Telefónica in addressing the government’s concernsPeople’s Army

Saudi Telecom (Saudi Telecom Company), the state-controlled operator in Saudi Arabia, has caused an uproar with its partners A surprise entry into the ownership of Telefónica. The company aspires to become the main shareholder in the Spanish telecommunications company with a 9.9% stake, and achieve this You must obtain express permission from the Spanish government.

It has been nearly two months since the Saudi Telecom Company announced its entry into the capital of the Saudi Telefonica Group The license application has not yet been formalized before the government To complete control of the 9.9% shareholding package, he still has not revealed when he will do so and still has not confirmed whether he will ask to sit on the board of directors of the Spanish group. While the wait is long, the government insists on shedding light The strategic nature of phoneof Spain and its determination to guarantee the company’s independence and national interests at all times.

The Arab operator, which is 64% controlled by a Saudi sovereign fund, is moving to calm matters and confirm the friendly intentions of the operation. Saudi Telecom took advantage of the presentation of its quarterly results to promise “cooperation” with Telefonica and express its “full confidence in the company.” Growth and upside potential“From the group led by José María Alvarez Ballete.

“Telefónica is one of the largest telecommunications companies in the world with a presence in key markets such as Spain, Germany, the UK and Brazil. This investment seeks to Enhancing cooperation between the two companies “So that they can benefit from all the opportunities available in the future,” said Saudi Telecom Company CEO Al-Olayan Al-Wataid.

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STC highlights the process as “A milestone in the group’s expansion and growth strategy” The deal itself is a sign of confidence in Telefónica’s “sustainable growth and upside potential.” The Saudi company hails the Spanish telecom company’s “unique portfolio of high-level infrastructure assets and next-generation platforms” as key pieces to justify its interest in a collaboration between the two companies.

Government surveillance

Saudi Telecom acquires a direct participation of 4.9% of the Spanish company’s shares and another 5% indirectly through financial derivatives., with a total of about 2.1 billion euros. The Saudi Group can currently only exercise voting rights corresponding to that direct package of 4.9%.

The Arab operator must request permission from the Ministry of Defense and obtain subsequent approval from the Council of Ministers if it intends to exercise political rights of up to 9.9% or if it confirms its intention to be on the company’s board of directors. Telefonica. The government cannot take any action if the new investor does not take action and activate the process to exceed the current level.

“Telefónica is a strategic company for Spain because of its role in the field of communications, but also in the field of defence,” government spokeswoman and acting Minister of Regional Policy, Isabel Rodriguez, stressed on Monday at the conference. Council of Ministers. “The government defends this Strategic interest For our country, at the same time as we attract foreign investments to attract new technologies, innovation, growth, creating and generating good jobs that this type of companies in our country and their new investments entail.

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The government avoided commenting on whether it was among the maneuvers it was considering Ensuring the company’s independence and, ultimately, its SpanishnessThere is a possibility that the public holding company for industrial properties SEPI will buy a package of shares in Telefónica, with the support of Spanish businessmen, as reported by El Confidencial newspaper. SEPI’s acquisition of 5% would create a stable core of Spanish shareholders, along with BBVA (4.87%) and Caixabank (3.5%, which adds another 1.5% in the hands of Criteria, the investment arm of Fundación Caixa).

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