The Spanish government says it is analysing the acquisition of a 9.9% stake in the incumbent telco Telefónica to stc Group.
The transaction, for €2.1 billion, was announced earlier this week and if concluded would make the Saudi company the largest shareholder in Telefónica.
Reuters reports that Nadia Calvino, Spain’s acting economy minister, said that stc contacted the Spanish government on Tuesday (September 5) to inform it of the deal. She added that “Telefónica is a strategic company for our country and as government we will apply all the mechanisms that are necessary to prioritise the defence of our strategic interests”.
Telefónica provides services to Spain’s defence industry and the government could potentially block the sale.
Reuters notes that the Spanish government introduced legislation to block acquisitions of stakes of 10% or more in listed companies by entities from outside the European Union and European Free Trade Association to try to prevent hostile takeovers of companies whose values have plummeted since the Covid-19 pandemic.
The threshold at which the government can intervene was recently lowered to 5% for companies related to defence.
