Spain allows Saudi Arabian STC to increase its stake in Telefonica from 9.9% to a reported -

El Pais reported that the Spanish government had given green light to Saudi Arabia’s largest telecoms company, STC Group to increase its stake in Telefonica from 5% to 9.9%.

A spokesperson from the Economy Ministry declined comment.

STC announced last year that it was aiming to acquire a 9.9% stake in the Spanish Telecoms Company, worth approximately 2.4 billion Euros ($2.53 billion), and become a major shareholder.

The Saudi group claimed at the time that it held a 4,9% stake in Telefonica, and that financial instruments gave it an additional 5% of what it called "economic exposure" to the company.

The Spanish government was required to approve the deal, as Telefonica is a provider of defence services and therefore considered a strategic firm.

The government's top officials were opposed to STC's decision at the time, and eventually decided that it would acquire its own 10% stake through the state-owned company SEPI.

The Spanish holding company Criteria also increased its stake in Caixbank, the largest lender in Spain by assets, to 9.99%.

The Saudi firm has stated that it does not plan to control or gain a majority share in Telefonica.

(source: Reuters)