Saudi interests in Spanish companies

The Saudi Arabian company STC (Saudi Telecommunications Company) announced on Tuesday that it has acquired a 9.9% stake in Telefónica for a total of 2.100 million euros. Thus, he becomes the main shareholder of the company. The purchase focused on the interest Saudi Arabia may have in Spanish companies, a decision experts interviewed told is part of the country’s strategy to move away from its high economic dependence on oil.

Context. STC is one of the largest telecommunications companies in Saudi Arabia, offering services in various categories such as financial technology or cybersecurity. As stated in the 2022 annual report, the Saudi Arabian Public Investment Fund (FIP) is the main shareholder of the company as it owns 64% of the company, giving it a fundamental role in controlling the company.

Buying 9.9% of a Saudi company does not violate the anti-danger law

For Francisco Joaquín Cortes, coordinator of the master’s program in financial and banking consulting at the International University of La Rioja (UNIR), the acquisition of Telefónica by a Saudi company is not a strange operation. “Telefónica, like many other companies that have enjoyed wide public participation in their time, are companies that were originally headquartered in Spain, but now they are global and have different investors and various investment vehicles,” he explained to, adding that in this case, this company is “very compatible with the activities of Telefónica”.

From the political sphere, this operation was struck out as a step towards a possible takeover (OPA). However, Cortez notes that he is not violating anti-takeover legislation, which limits acquisitions to 5% and prohibits spending that amount without permission from the Council of Ministers. “At the moment, out of 9.9% of operations, 4.9% are sustainable. For the remaining 5%, the investor took positions in the field of product and derivative instruments in order to obtain the right to purchase them, ”the UNIR expert points out.

According to Kortes, this decision can be positive for Telefonica: “It will be a great financial relief for the company.” In fact, according to news agency Europa Press, the Spanish company’s shares rose 3% on the stock market after the announcement of the Saudi acquisition.

What are the reasons behind a Saudi company buying in Spain?

Experts point to several acquisition targets. Speaking to, Baltasar Manzano, professor at the University of Vigo and visiting researcher at the energy economics think tank, believes the Saudi company’s decision “is not a hostile takeover” and, in fact, believes that “it is non-commercial participationfocused on promoting synergy between companies in the same sector”.

“Investing in Telefónica should not be rare: one telecommunications company invests in another,” continues Manzano.

Cortez agrees and confirms that this operation is not intended to “obtain control or majority ownership of the company”. In addition, the expert recalls that STC operates mainly in areas of Saudi Arabia, the Middle East and North Africa: “With Telefónica, it clearly complements the strategy of this company.”

What about the role of FIP, the Saudi Public Foundation? A professor from the University of Vigo elaborates that “this is a powerful investment through a sovereign investment fund that is just as powerful” and argues that “many countries with energy interests have something similar in the case of Norway.”

Economic Diversification: Saudi Interests in Spanish and International Companies

Spanish companies such as Telefonica are not the only target for Saudi investments, they originate in various countries. Target? Diversify the economy and reduce dependence on oil. Here’s how Manzano and Haizam Amira Fernandez, principal researcher at Elcano’s Royal Institute for the Mediterranean and the Arab World, explain it to

For Amira Fernandez, there are three aspects to the analysis of Saudi interests:

  • “An investment plan that achieves profitability.”
  • “Access to Knowledge and Technology for Saudi Companies”
  • Both image and prestige. Thus, the expert notes, Saudi Arabia is projecting its economic power and political will as an expansion strategy in strategic sectors.

Experts note that working with a Spanish company, like with others, is part of a strategic plan called Vision 2030. As researcher Elcano explains, this is “a transformative project presented by a ‘strong man’, the heir to the Saudi monarchy: Prince Mohamed bin Salman.” The plan is “part of the style of the Saudi Arabian government, hyper-personalized and strong-man oriented.” He formulates a vision, and then it is brought to life,” continues Amira Fernandez, who recalls that this means that decisions are not questioned.

With this project, they seek to “not depend on oil, a commodity with volatile prices, they want to look for more secure investments,” says Manzano, who concludes that the goal is as follows. save unstable wealth with something more solid.

For her part, Amira Fernandez agrees and points out that the goal of the project is to separate from hydrocarbons, on which they are highly dependent. “This is a kind of gap,” the expert gives an example, recalling that this is not the country’s first attempt. “In the 1980s, there was a very sharp drop in the price of oil, and the financial situation in Saudi Arabia was difficult, and they wanted to end this dependence,” he continues.

Gradually, the Saudi nation’s international presence is increasing to such an extent that the BRICS, a group of countries seeking to counterbalance the West, invited it to join, as reported by media such as Bloomberg.

Football, another Saudi investment

In addition to investing in companies in Spain and Europe, Saudi Arabia is following the example and strategies of other monarchies such as the United Arab Emirates. Amira Fernandez is referring to the Saudi Arabian football league and European league sponsorship.

For example, Spain’s LALIGA announced last July a sponsorship deal with Visit Saudi that “demonstrates the strong historical bond between LALIGA and Saudi Arabia.” In addition, in recent years they have signed top level players for their own league such as Cristiano Ronaldo and Aymeric Laporte (who played for Manchester City) who play for Al Nasr; Neymar Jr., who has just signed with Saudi Al-Hilal, or Celta star Gabri Veiga, who has signed with Saudi Al-Ahly until 2026.

“Saudi Arabia will come later, but with greater resources and the desire of an heir to transform the country from top to bottom,” concludes researcher Elcano.


Baltasar Manzano, professor at the University of Vigo

Francisco Joaquín Cortes Garcia, Coordinator of the MA in Financial and Banking Counseling at the International University of La Rioja

Hayzam Amira Fernandez, Principal Investigator at the Elcano Royal Institute for the Mediterranean and the Arab World

Saudi Arabia Public Investment Fund (FIP) website

Saudi Telecommunications Company (STC) website

LALIGA statement

Europe Press

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