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Saudi telecom operator stc acquired a 9.9% stake in Spain-based Telefonica for SAR 8.5 billion (2.1 billion euros), according to a Tadawul statement.
This stake represents 569.3 million shares, stc said, adding that the transaction was funded through a mixture of its own resources and bank debt.
The impact of this investment will be positive in the long term.
This investment is in line with stc’s growth strategy to expand by acquiring stakes in value-added strategic assets in promising markets, along with benefiting from the return on these investments to support stc’s growth, expansion, and capital recycling efforts. In turn, these efforts will enhance stc’s ability to invest in new domains and maximize shareholders' equity in a sustainable manner.
Telefonica is a leading European telecommunications operator and has a unique portfolio of best-in-class infrastructure assets and cutting-edge technology platforms, as well as a significant presence in three of the largest European markets, namely Spain, Germany, and the UK, in addition to its large presence in Latin America that includes Brazil and other countries.
stc has a vote rate of 4.9%, as per the relevant regulations. The telco entered into a set of financial instruments that will give it the right to vote on the remaining part of the acquired stake after obtaining the approval of the relevant authorities.
The investment will not affect stc’s approved dividend policy.
Any material further development will be announced in due course, the telecom operator said.
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