Government orders Sepi to buy 10% of Telefónica to become main shareholder

TelefónicaJosé María Álvarez-Pallete, Executive Chairman of Telefónica

The State Industrial Ownership Corporation (Sepi), the public body controlled by the Government through the Ministry of Finance, will take up to 10% of the capital of Telefónica (TEF), which will make it the largest shareholder of the telecommunications operator, ahead of Caixa, BBVA and Saudi Arabia’s STC.

The Sepi informed the CNMV on Tuesday in a note in which it stated that “the Council of Ministers in its meeting today -yesterday- has agreed to order the State Industrial Ownership Corporation (Sepi) to carry out the acquisition of up to 10% of the share capital of the company Telefónica”. Sepi points out that the group is a “leading company in the field of telecommunications both in Spain and internationally. It carries out a set of activities that are of crucial importance for the economy, the productive fabric, research, security, defence and the welfare of citizens”.

This operation represents a partial renationalisation of the operator, which has been totally private since 1997, when José María Aznar’s PP government completed the privatisation initiated by the previous PSOE government.

Sepi’s statement also notes that “with a view to permanence, Sepi’s participation will provide Telefónica with greater shareholding stability for the company to achieve its objectives and, therefore, will contribute to safeguarding its strategic capabilities. Sepi will proceed to carry out the formalities and actions that will enable the process to be set in motion in order to complete the acquisition of the necessary volume of shares, minimising the impact on the share price”.

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