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STC, Saudi Arabia’s largest telecoms operator, contacted the Spanish government last week to inform it of the deal, which if approved, will make STC the Spanish telecom’s largest shareholder
The Spanish government is reportedly carefully examining STC’s proposed acquisition of a 9.9% stake in Telefónica worth €2.1 billion, which was announced last week.
‘My opinion is that we cannot allow this operation to continue’ said Yolanda Diaz, Spain’s labour minister and second deputy prime minister
“We cannot allow the operation to continue,” she continued. “Telefonica manages the most important thing in our lives – data.”
Speaking outside the G20 in New Dheli this week, Spain’s First Deputy Prime Minister and Minister for Economy and Digitalization Nadia Calviño confirmed that the Spanish government will “analyse the operation with the upmost rigor and activate the appropriate mechanisms to protect our general interest”.
Calviño further added that “Telefónica is a strategic company for our country and as government we will apply all the mechanisms that are necessary to prioritise the defence of our strategic interests”, whilst highlighting the importance of preserving Spain’s ability to attract foreign investment.
She noted that she had not had the opportunity to speak with Mohamed bin Salmán, the Saudi crown prince at the New Dheli summit, but stressed she is in “constant contact” with José María Álvarez Pallete, Telefónica’s president.
The Spanish government prohibits the foreign acquisition of over 10% in firms active in sectors related to public order, public security, or public health without prior governmental authorisation, which is why STC’s intends to take a 9.9% stake. Acquisitions of less than 10% are also prohibited if this would result in management of the company.
The Spanish government has the right to question the acquisition, as the threshold at which the government can intervene was recently lowered to 5% for defence related industries, and Telefónica provides services to Spain’s defence industry.
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