The move is worth around US$2.25 billion, with stc also looking to secure voting rights for the 5% it owns in ‘economic exposure’ to the company.
The acquisition, stc says, represents another milestone in the group’s expansion and growth strategy, though the deal is reportedly still to be cleared by Spanish regulators.
“Our investment in Telefónica demonstrates our confidence in Telefónica’s leadership, its strategy and its ability to create value,” Olayan Alwetaid, CEO of stc Group said.
“As long-term, supportive shareholders, we are committed to strengthening our partnership.”
stc is the largest operator in Saudi Arabia and primarily owns stakes in companies operating in Kuwait and Bahrain.
It is 64% owned by Saudi Arabia’s Public Investment Fund (PIF), the main engine of Crown Prince Mohammad bin Salman.
PIF has made several notable acquisitions and investments in recent years across various sectors.
stc maintained that it “did not intend to acquire control or a majority stake” but rather it saw this as a “compelling investment opportunity”.
Earlier this year, Saudi Arabia announced more than US$9 billion in investments in the technology sector to bolster digital transformation in the country.
The investments are led by a US$2.1 billion commitment from Microsoft to bolster cloud in the Kingdom and a US$1.5 billion investment from Oracle to boost cloud computing capacity.
