The Spanish government has announced that it will acquire a 10% stake in the country’s telecoms giant, Telefónica, in response to Saudi Telecom´s recent buy-in of the opeator.
The move marks the state’s return to Telefónica’s shareholder register for the first time since 1999, when the company was privatised.
Telefónica shares jumped almost 6 per cent on the news that Sepi, the Spanish government´s holding company, would be taking the stake.
In a press announcement, the government said that the move would help the company “achieve its objectives and will contribute to safeguarding its strategic capabilities and essential importance”.
Spain’s decision raises the stakes in the battle for influence at Telefónica, a national champion with businesses in security and defence. It has been targeted by STC — majority-owned by Saudi Arabia’s sovereign wealth fund — as the group seeks to expand its investments in Europe.
The government said the acquisition will make it the ‘reference public shareholder’ in Telefónica, and justified the move on the grounds that the company is “a leader in the telecommunications sector and of key importance in other strategic areas”.
Earlier this year Saudi Telecom (STC) paid €2.1 billion for a 9.9% share in Telefónica which has a strong presence in Latin America and the United Kingdom.
Saudi Telecom at the time of the purchase said that it did “not intend to acquire control or a majority stake” in Telefónica.
But it caused concern in Spain’s government, which only learned of the transaction at the last moment as it was below the 10% threshold where it would have required approval.
The government said at the time it intended to remain vigilant as Telefónica was important in ensuring the country’s strategic autonomy.
The return of the Spanish state among Telefónica’s shareholders comes as the company is in the midst of shedding a third of its 15,000 Spanish workforce, as it tries to boost its profitability.
The company currently has a global workforce of over 100,000 people.