Emirates Telecommunication Group, formerly known as Etisalat and now rebranded as e&, has acquired a 9.8% stake in Vodafone Group Plc, a British mobile carrier for $4.4 billion.
According to Bloomberg, the deal makes the UAE-based company the largest shareholder in Vodafone, ahead of BlackRock Inc., the Vanguard Group Inc., and HSBC Holdings Plc. In total, the group acquired approximately 2,766 million shares in Vodafone at $1.59 (130 pence), reflecting a premium of about 10% to its closing price of 117.82 pence on Friday.
Meanwhile, the state-controlled group said it is not planning to make an offer for the rest of Vodafone, though it revealed that it wants to remain a long-term investor.
Hatem Dowidar, Group Chief Executive of e& said “Vodafone is one of the leading businesses at the heart of digital communications in Europe and Africa with a compelling business offering critical connectivity and digital services,”
“Our investment represents a unique opportunity to acquire a significant stake in one of the leading and strongest global telecom brands, and a company that we know well. We are looking forward to building a mutually beneficial strategic partnership with Vodafone with the goal of driving value creation for both our businesses, exploring opportunities in the rapidly developing global telecom market, and supporting the adoption of next-generation technologies.”
He said, “e& sees this investment as highly efficient use of its strong balance sheet at a compelling and attractive valuation with strong currency diversification benefits. It provides a clear opportunity to realise future value through potential capital gains and dividends. It may also lead to possible commercial partnerships in the areas of R&D, technological applications, and procurement.”
The company, based in Abu Dhabi, was founded in 1976 and is the UAE’s oldest telecom business. It has operations in nearly 16 countries across the Middle East, Asia, and Africa, serving more than 156 million customers.