Spanish telecommunications they were preparing for many shocks that would further stress the industry. The upcoming merger between Orange and MásMóvil, subject to the terms imposed by Brussels, the possible sale of Vodafone Spain, the corporate moves between independent fiber optic operators… are critical moves that will shape the market and strategy. of all companies. But the national telecommunications industry was shaken by an unexpected earthquake triggered by the Saudi Arabian petrodollar.
Surprise attack by Saudi State-controlled operator Saudi Telecom (STC) telephone goes beyond existing core partners (without the traditionally diluted and bulky stock packages). The move implies the entry of the STC as: first shareholder Spanish company with 9.9% participation With 2,100 million, it’s well ahead of current major shareholders: BBVA (4.87%), Blackrock (4.48%) and Caixabank (3.5%).
According to information received from Telefónica, the group was unaware of the Saudi operator’s acquisition until yesterday. Saudi Telecom The Spanish bought 4.9% of the company’s shares directly and the other 5% indirectly through financial derivatives, taking advantage of this at a market price of 2,100 million at which the package is currently valued on the stock market. hence the low price of the group. STC is listed on the Saudi Arabian stock exchange with a capitalization of 49.2 billion euros, more than double that of Telefónica.
The ‘whole’ Spanish government will be needed
The operation can only be completed with the express consent of the Government. HE ‘antiopas shield’ Introduced during the pandemic to protect companies in strategic industries from unwanted takeover operations, this practice often requires government approval for bundle purchases above 10%. But in this case Threshold lowered to 5% for defense related companies like Telefónica.
Currently, the Saudi group will only be able to exercise voting rights, corresponding to 4.9% direct participation, but will have to wait for mandatory regulatory clearances to continue the physical execution of the other party’s financial instruments. 5% to acquire rights to all shares it claims to control.
STC, 64 percent controlled by the Saudi sovereign wealth fund PIF, assures that it does not intend to take control or a majority stake in the Spanish group, and that its investment demonstrates its support for management led by the current management team led by José María Álvarez-Pallete, increasing profitability and creating value for its shareholders. will complete the presentation of a new strategic plan that will last until 2026.
Another shock to the industry
The Spanish telecommunications industry was already preparing for major institutional moves that would change the overall status quo. The entire telecommunications industry is waiting for when and above all how this will be done. merger of Orange Spain and MoreMobile to create a new national giant. The European Commission believes that the operation could distort competition in the industry and has ‘stopped the clock’ in the merger analysis process in order to have all the time necessary to delve deeper.
The revolution, which will mean the union of the second and fourth largest operators in the Spanish market, will be added to the revolution, the depth of which will depend on the community officials. It is accepted that Brussels will apply the conditions (remediesaccording to economic and social jargon) approving the operation forces companies to divest some assets in order to gain regulatory approval. However, the harshness of these demands will determine other corporate moves and the strategies of other operators.
Vodafone has launched a “strategic review” of its operations in Spain, which could result in the sale of its local subsidiary, in whole or in part, due to a decline in revenues due to excessive competitive pressure and aggression in recent years. Low cost carriers. Brussels’ final conditions for the Orange-MásMóvil union and its reflection on the Spanish market will be decisive for Vodafone Group to decide how to redefine its strategy in this union.
Promising new operators Digi or Avatel They also expect to strengthen their expansion by acquiring assets, particularly fiber and mobile networks, which the European Commission has forced to divest from the newly merged operator; this will affect both the retail and wholesale business of all operators.