Skip to content Skip to Search
Skip navigation

STC buys 9.9% of Spain’s Telefonica for $2.25bn

Saudi telecom STC became the largest shareholder in Spain's Telefonica in September Reuters/Faisal Al Nasser
Revenue reached a record high of SAR72.33 billion in 2023, up 7.3 percent year on year

Saudi telecoms conglomerate STC Group has acquired a 9.9 percent stake in Spain’s Telefonica for SAR8.5 billion ($2.25 billion) as part of its global expansion drive.

The investment makes the Saudi listed company the top shareholder in the Spanish telecom major after Spanish bank BBVA’s 4.9 percent holding.

The holding comprises 4.9 percent of Telefonica’s shares and financial instruments, providing an economic exposure over another five percent of the share capital.

STC plans to secure voting rights for that five percent interest held through financial instruments after receiving regulatory approvals, the company said in a statement.

“Telefonica and STC Group share many similarities, with a vision to use technology to connect people and a strategy to drive growth,” said Mohammed Al Faisal, chairman of STC Group.

“This long-term, significant investment is a continuation of our growth strategy as we invest in vital technology and digital infrastructure sectors across promising markets globally.”

Spain’s acting economy minister Nadia Calvino on Wednesday told reporters the Madrid government was reviewing the deal.

“Telefonica is a strategic company for our country and as government we will apply all the mechanisms that are necessary to prioritize the defense of our strategic interests,” Calvino was quoted as saying by Reuters.

Olayan Alwetaid, chief executive of STC Group, stated that the company does not intend to acquire control or a majority stake.

STC’s growth strategy has resulted in several investments in the ICT sector inside Saudi Arabia and globally, the most recent being the acquisition by its subsidiary Tawal of United Group’s telecommunications tower assets in Bulgaria, Croatia and Slovenia.

Calling STC’s investment “friendly”, Telefonica said the Saudi company supports its management team and strategy.

STC, 64 percent owned by the Public Investment Fund, owns subsidies and stakes in companies operating in Kuwait and Bahrain.

Gulf telecom companies have started investments abroad, with UAE’s e&, formerly Etisalat, raising its stake in Vodafone Group to 14 percent in March.

Nishit Lakhotia, head of research at Sico, a leading regional investment bank headquartered in Bahrain, said in a note to clients on Wednesday morning the deal will provide STC Group with a good dividend yield of around 8 percent or more.

Going on Telefonica’s dividend payments for 2022, Lakhotia estimated STC Group will receive a dividend income of EUR170.8 million ($183.44 million) for 2023.

“While we for now do not see any other strategic benefit for the telco. However, as we have seen from Etisalat’s (e&) example, share price and currency volatility remains a risk,” he added.

Latest articles

Turkish Airlines flew 18.5 million passengers from January to March 2024, up 8.4 percent annually

Turkish Airlines revenue rises 10% to nearly $5bn

Revenue at Turkey’s national carrier Turkish Airlines rose 10 percent year on year in the first quarter of 2024 to $4.8 billion, driven by growing passenger numbers. Turkish Airlines flew 18.5 million passengers from January to March, up 8.4 percent annually, it said in its latest investor presentation. Passenger revenue climbed 5 percent year on year […]

The Adnoc Drilling head office. Adnoc will not be able to sell any more of its stake for at least six months

Adnoc Drilling successfully floats further stake

Abu Dhabi state oil company Adnoc has successfully placed a further 5.5 percent of listed subsidiary Adnoc Drilling, increasing the company’s free float to 16.5 percent. The sale of an additional 880 million shares through a book-building process will boost trading of Adnoc Drilling’s stock on Abu Dhabi’s bourse. Adnoc restricted the share sale to […]

John Kirby, the White House national security communications adviser, said Saudi Arabia and the US were 'closer than we’ve ever been' to a deal

Saudi Arabia ‘close’ to US defence pact and arms deal

Saudi Arabia could be close to a security pact with the United States that would enable the kingdom to buy arms, potentially including the sought-after F-35 fighter jet, and obtain some form of US defence guarantee, White House officials said this week.  John Kirby, the president’s national security spokesperson, said on May 20 that the […]

Marina Storti, CEO of WTA Ventures, front right, and Kevin Foster, head of communications at PIF, front left, at the signing of the sponsorship agreement between the two

PIF to sponsor women’s world tennis rankings

Saudi Arabia’s Public Investment Fund (PIF) is giving its name to the women’s world tennis rankings, the latest sponsorship deal in the kingdom’s drive to dominate global sports.  “The PIF WTA Rankings will track players’ journeys, and PIF will work with the WTA to celebrate and support players’ progress,” PIF said, calling the deal “multi-year”.  […]