The main telecommunications company in Saudi Arabia buys 9.9% of Telefónica and becomes the largest shareholder

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STC Groupthe main telecommunications group in Saudi Arabia, has acquired 9.9% of Telefónica for 2,100 million euros, which will make the company the largest shareholder of the Spanish operator, ahead of BlackRock, Caixabank, BBVA.

The entity has communicated in a statement that it does not intend to acquire control or a majority stake in Telefónica. The company has acquired a 4.9% stake in the share capital directly and another 5% through financial instruments.

STC Group, is the largest operator in Saudi Arabia and is 64% owned by the PIF, the country’s sovereign fund. The company has stressed in a statement that the investment reflects its confidence “in the management team of Telefónicaits strategy and ability to create value”. The company is listed on the local stock market and capitalizes just over 49,000 million euros, with operations in Saudi Arabia, the Middle East and North Africa. The CEO of the group, Olayan Alwetaidhas stressed that it is a long-term investment and has shown confidence in the future of the group.

With this participation, the company could opt for one or even two seats on the Board of Directors, since BBVA y CaixaBank each have one seat holding less than 5% of the capital per entity.

The Saudi bet comes at a moment of special relevance for Telefónica that, practically in two months (on November 8) it will present a new strategic plan with which it seeks new energy in the market with a strategy in which the cash flow, and business provided to other companies (B2B), such as technological services or new ways to monetize networks.

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