The Middle East telecommunications group has taken a nearly 10% stake in Vodafone as the British mobile phone company comes under pressure to shake up the business.
The state-controlled Emirates Telecommunications Group, recently rebranded by Etisalat into e &, is now Vodafone’s largest shareholder after confirming a £ 3.3 billion attack on the British group on Saturday.
E & said it has made the investment “to gain significant exposure to a world leader in connectivity and digital services” and has no plans to launch an takeover bid, a statement blocking the company from making such a move for at least six months.
The Abu Dhabi-based group, which set up a special holding company, Atlas 2022, to control Vodafone’s stake, said it plans to be “a long-term and supportive shareholder in Vodafone and does not seek to control or influence the company.” board or management team ‘.
Vodafone claims on its website that it supplies government services, including the Ministry of Justice, which means that any new owner will have to be carefully scrutinized.
A government spokesman said: “The government has stable processes in place to ensure that its IT systems are secure and protected from threats. When national security issues arise in connection with an acquisition, the government has the power under the National Security and Investment Act to intervene when necessary.
Vodafone CEO Nick Reed is under pressure to simplify the sale of subsidiaries and improve returns after a more than 20% drop in its share price since taking office in 2018.
E&A’s involvement comes after Vodafone revealed it was in talks with rivals in the UK, Spain, Germany and Italy, in clear response to pressure from Cevian, Europe’s biggest investor activist, who took a stake in Vodafone and called for shaking the business. up.
Cevian, headquartered in Sweden and known for its long-term position to turn the business around without taking aggressive action, is looking to consolidate Vodafone’s sprawling empire to focus on its most profitable markets and inject more telecommunication experiments at board level.
Hatem Dowidar, CEO of E&A, former CEO of Vodafone, added that he “looks forward to building a mutually beneficial strategic partnership with Vodafone to boost value creation for both our businesses by exploring opportunities in the fast the evolving global telecommunications market and support for the adoption of next-generation technologies. “
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E&A recently bought a controlling stake in Maroc Telecom and acquired the Emirati online food market ElGrocer, as it aims to become a global conglomerate for technology investment.
Vodafone, which is due to update the city on its results for the full year on Tuesday, said it looked forward to “building long-term relationships with Etisalat” and continued to “make good progress with our long-term strategic plans”.
Shares of Vodafone fell 0.9 pence to 117.82 pence on Friday, valuing the company at £ 33 billion.
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