The Council of Ministers has authorized Saudi Telecom (STC) to increase its stake in Telefónica from the current 4.9% to 9.97%. This was confirmed by the Minister of Economy, Trade, and Business, Carlos Cuerpo, at the subsequent press conference. Regarding whether the Saudi operator will request a seat on the Board of Directors of the listed Spanish company, the Minister stated that ‘that matter corresponds to the company itself.’
In this regard, according to Europa Press, the telecom STC, which is 62% controlled by the Saudi sovereign fund Public Investment Fund (PIF), highlighted that the Government’s authorization to reach a 9.97% stake in TEF grants it the right to appoint a representative on the company’s Board of Directors. This authorization process has received approval from the Foreign Investment Board (Invex), an interministerial body responsible for evaluating foreign acquisitions to ensure protection of security, health, and public order. The conditions set for its approval require that the Saudi group commits i) to maintain TEF’s listing on the stock exchange; and ii) to ensure that decisions affecting national security are protected, as well as guaranteeing that the company’s social and tax headquarters remain in Spain.
Cuerpo emphasized that with its current partners, TEF will be able to grow in volume and have better opportunities in the Middle East. In his opinion, it is an excellent window of opportunity.
