LONDON: Saudi Arabia’s stc Group has agreed to buy a 9.9 percent stake in Spanish business Telefonica for €2.1 billion ($2.25 billion), through an acquisition of shares and financial instruments.
“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, the chairperson of stc.
“This long-term, significant investment by stc is a continuation of our growth strategy, as we invest in vital technology and digital infrastructure sectors across promising markets, globally.”
Olayan Alwetaid, stc Group’s CEO, said: “Our investment in Telefonica demonstrates our confidence in its leadership, its strategy and its ability to create value. As long-term, supportive shareholders, we are committed to strengthening our partnership.
“We do not intend to acquire control or a majority stake but rather we see this as a compelling investment opportunity to use our strong balance sheet while maintaining our dividend policy.”
Telefonica is one of the largest telecommunications companies in the world, with a significant presence in its home country, Germany and the UK.
The group said its growth strategy had resulted in a number of investments within Saudi Arabia and globally, the most recent of which before the Telefonica announcement on Sunday was the acquisition by stc subsidiary Tawal of United Group’s telecommunications-tower assets in Bulgaria, Croatia and Slovenia.
stc Group’s acquisition of Telefónica signifies its intent to harness the capabilities and expertise that Telefónica brings to the table. By coming together, these two firms aim to solidify their presence at the forefront of technology innovation.
“This acquisition represents another milestone in stc Group’s expansion and growth strategy, and reflects stc Group’s confidence in Telefónica’s sustainable growth and upside potential,” the company said in a press release.
It added that Telefónica will benefit from “a unique portfolio of best-in-class infrastructure assets and cutting-edge technology platforms.”
The company said it’s developing state-of-the-art capabilities in adjacent areas such as cognitive intelligence, edge computing and the Internet of Things.
stc, with a 64 percent ownership by Saudi Arabia’s Public Investment Fund, plays a crucial role in the Kingdom’s Vision 2030, designed to diversify the nation's economy.
Its presence extends beyond Saudi Arabia to Kuwait and Bahrain, where it operates subsidiaries and holds stakes in various companies.