Spain will ensure it protects the country’s “strategic autonomy” after Saudi Telecom Co. said it plans to snap up a near 10% stake in telecommunications giant Telefonica SA for about $2.25 billion, the government’s spokeswoman said.
(Bloomberg) — Spain will ensure it protects the country’s “strategic autonomy” after Saudi Telecom Co. said it plans to snap up a near 10% stake in telecommunications giant Telefonica SA for about $2.25 billion, the government’s spokeswoman said.
“There are channels to preserve our strategic autonomy that the government sets in motion,” Isabel Rodriguez, who is also minister of territorial affairs, said in an interview with state-run broadcaster TVE. “Telefonica is not just an emblematic company but also a strategic one.”
It’s normal procedure in Spain for the government to have the final say on acquisitions of stakes of more than 5% in companies deemed to be strategic. Prime Minister Pedro Sanchez’s administration so far hasn’t spelled out a clear position on the planned transaction.
The last decision on a major deal of this type by the government was when it gave the green light to IFM Global Infrastructure’s 4.9 billion-euro ($5.3 billion) bid to buy nearly a quarter of Naturgy Energy Group SA in 2021.
The Saudi government-controlled company purchased about 569 million shares and is using financial instruments that together will hand it a 9.9% interest in Telefonica once approved by regulators, according to a filing posted late Tuesday.
(Updates in third paragraph with background on government approval process.)
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