The government will control and become Telefonica’s largest shareholder when it purchases 10% of the operator’s share capital. State-owned Sepi, which had intended to participate in strategic companies, announced just over a month ago that it intended to become a shareholder in Spain’s largest telecommunications operator.

This was thanks to an operation undertaken by Saudi Arabia through its state-owned telecommunications company. STC said it intends to obtain up to 9.9% of Telefónica’s total shares. The executive branch perceived this maneuver as a hostile move and tried to protect itself at all costs.

“The entry into the company’s capital is in line with the countries around us. Germany owns 13.8% of the capital Deutsche Telecom; France has 13.4% in Orange; or Italy, which in August 2023 accepted an agreement to increase its participation to 20% in the company that combines the fixed telephony assets of Telecom Italia,” the government defends itself after the statement. Now he will receive 10% and will become the great banner of the almost hundred-year-old company and, above all, the custodian telecommunications company on the board of directors headed by José Maria Alvarez-Pallet.

It was the figure of the company’s president that was key in this entire process and, if it materialized purchase 10% on Sepi’s part, will become stronger after several difficult months in his management. The operator manager always had support for Pedro Sanchez and the rest of the ministers for their administration. During the pandemic, Telefonica was one of the key companies and had to redouble its efforts to ensure that the country could move forward with the help of technology. Cybersecurity and the defense sector are some of the other examples where telecommunications company and Moncloa work side by side. Thus, a trusting relationship has developed between the manager and the businessman.

In recent months, when it became known that UTK wants to buy 9.9% of Telefónica, the relationship has strengthened and, as sources in the telecommunications sector note, Pallete held several meetings with the Prime Minister and Nadia Calviño, during which they exchanged impressions about the new order within the operator.

As the newspaper explains, the emergence of a new shareholder took the operator’s management and the government by surprise. And Telefónica is a company that, thanks to its business activities, is called strategic. The company controls the sensitive data of millions of customers and owns critical infrastructure in the telecommunications sector. This fact forced Moncloa, headed by the Ministry of Defense, to doubt its entry into the authorized capital and oppose the ownership of almost 10% of the stake by UTK.

Alvarez-Pallete was unaware of UTK’s work. That’s because, as this newspaper has previously reported, he had to fly from California, where he was scheduled to hold meetings with major technology companies, to Saudi Arabia to talk to Saudi leaders, explain the new strategic plan and learn about the company’s intentions. telecommunications company Asian in a Spanish company. In this sense, Moncloa has always trusted the good work of Pallete within Telefónica, so the arrival of Sepi will serve the operator’s management to strengthen its position.

Board of Directors

When Sepi receives the 10% it has reported to the National Securities Market Commission, there will be significant chair dance on the board of directors. According to informants, Moncloa could have up to two representatives on Telefonica’s top executive body. It should be remembered that on the advice telecommunications company There is also Javier de Paz, a man associated with the PSOE. This influential native of Valladolid, who has just turned 65, has received reinforcements from Jose Maria Alvarez-Pallete, which gave him the presidency of the new Sustainable Development and Regulatory Commission.

Thus, taking into account the figure of Pallete, possible new directors and the national coat of arms constituting CaixaBank, BBVA, Criteria far exceeds the majority of shareholders, reaching 25% and leaving the position of STC very limited, as witnessed by the Government and other shareholders such as Isidre Faine (Criteria), acquired shares in order to have more power and stop possible plans that they had in Telefónica.

It was vital for the government to maintain this new position and stop STC’s ambitions within the operator. However, telecoms sources say the Saudis will not want to take a 9.9% stake while they are profiting from their position.