Spanish minister says she will work to block Saudi purchase of Telefonica

By Alyssa McMurtry

OVIEDO, Spain (AA) – Spanish minister Yolanda Diaz said on Friday that she will work to block Saudi Telecom’s purchase of a major stake in Spanish telecommunications company Telefonica.

“We cannot allow the operation to continue,” Diaz, Spain’s acting labor minister and second deputy prime minister, told reporters in Rome. “Telefonica manages the most important thing in our lives – data.”

Telefonica is one of the world’s largest telecom companies, operating in Spain, across Europe and in Latin America. It also provides equipment and services to Spain’s military.

On Tuesday night, Spanish officials were caught off guard when Saudi Telecom announced it purchased a 9.9% stake in Telefonica worth €2.1 billion ($2.25 billion). The move would make the state-controlled Saudi Telecom the largest shareholder in the Spanish telecom.

While Diaz, who also leads the far-left coalition partner Sumar, is not directly in control of economic arrangements, she said she has sent her demands to Spain’s Economy Minister Nadia Calvino.

On Wednesday, Calvino said that Spain was scrutinizing the purchase and pledged to apply “all necessary measures” to defend Spain’s interests.

However, some observers suggest that blocking the Saudi purchase could harm other Spanish interests.

For instance, Spanish company Renfe operates the profitable Mecca–Medina high-speed train line.

Another state-owned Spanish company, Navantia, also signed a memorandum of understanding with Saudi Arabia last year to build combat ships valued at more than $1 billion.

In 2018, the Spanish government announced it would block the delivery of 400 laser-guided bombs to Saudi Arabia, saying the weapons might be used to harm civilians in Yemen.

However, later that month, the government did a U-turn. The move came amid protests from workers at Navantia who were about to sign a contract to build five corvettes for the Saudi navy.

Spain’s foreign minister at the time, Josep Borrell, said the contract “had to be honored.” When pressed on whether the Saudi government suggested that the warship deal was dependent on the arms sale, he said: “Saudi Arabia looks at its arms deals as part of its overall relations.”