Spain to protect ‘strategic autonomy’ after Telefonica's sale to Saudi Telecom

By Alyssa McMurtry

OVIEDO, Spain (AA) - The Spanish government said on Wednesday that it is focused on preserving its “strategic autonomy” after Saudi Telecom announced a €2.1 billion ($2.25 billion) investment in the Spanish telecom company Telefonica.

Yolanda Diaz, Spain’s acting second deputy prime minister, expressed concern over the move, calling Telefonica, one of the world’s largest telecommunications companies, a “guardian of sensitive data.”

While Diaz called for stronger regulations to protect Spain’s “digital future,” government spokesperson Isabel Rodriguez called for calm, saying the government is already evaluating the acquisition.

“Telefonica isn’t just an emblematic company, but a strategic operator,” Rodriguez told Spanish broadcaster TVE. “There are channels to ensure that investments that could affect our strategic autonomy are evaluated and controlled by the Spanish government.”

Saudi Telecom announced Tuesday night that it purchased 9.9% of Telefonica. The Spanish telecom operates not only in Spain but across Europe and the Americas.

Rodriguez admitted that the government only found out about the sale last night. This marks the first time a Saudi company has bought a major stake in one of Spain’s top companies.

Buying a 9.9% stake in a strategic company is the maximum limit allowed without government approval. In 2020, during the coronavirus pandemic, the government enacted anti-takeover legislation stipulating that any sale of over 10% of a strategic company must be given the green light by regulators.

Saudi Telecom says the acquisition positions the company as an “anchor shareholder” and marks a “milestone” in the company’s expansion strategy.