Spanish Government Analyzes STC Group’s Acquisition of Telefonica Stake

Spanish Prime Minister Pedro Sanchez has stated that the government is carefully examining STC Group’s move to become the largest shareholder of telecom giant Telefonica. Sanchez reassured that the country’s national defense and security will be protected throughout this transaction.

Saudi Arabia’s largest telecoms provider, STC, which is primarily owned by the kingdom’s sovereign wealth fund, PIF, has purchased a 9.9% stake in Telefonica for approximately $2.25 billion. However, the acquisition is still pending state approval.

Sanchez emphasized that the government possesses the necessary tools to exercise rigorous controls over the investment operation. Additionally, they will ensure that national defense and security, broadly defined, remain safeguarded. The deal will grant STC the status of the largest shareholder of Telefonica.

STC, with a 64% stake held by PIF, is the leading telecoms provider in Saudi Arabia and also owns shares in businesses operating in Bahrain and Kuwait. Sanchez further mentioned that their government will ensure that any foreign investments do not exceed limits that could potentially exert undue influence over strategic companies or grant access to critical technologies.

By analyzing the acquisition thoroughly and implementing necessary controls, the Spanish government aims to maintain the integrity and security of their national telecommunications sector.