UAE telco Etisalat buys a 9.8% stake in Vodafone to gain access to its IoT, telematics and other technologies. The company has bought approximately 2766 million shares in Vodafone, representing 9.8% of its issued share capital, for around $4.4 billion.
Etisalat, which these days calls itself e&, says it made the investment in Vodafone to gain exposure to its connectivity and digital services, particularly IoT, telematics, B2B and fintech services.
The Dubai-based telco said Vodafone’s strong reputation for being a digital-first operator, underpinned by its rigorous approach to corporate governance and well-regulated global footprint, made it an attractive opportunity.
Etisalat says it sees this investment as highly efficient use of its strong balance sheet. It provides a clear opportunity to realize 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.
Etisalat says it is fully supportive of Vodafone’s board and existing management team and its current business strategy. As such, it does not seek board representation and is confident about the company’s ability to unlock value from its organic business activity and other potential strategic transactions.
The plan is to be a long-term and supportive shareholder in Vodafone and not seek to exert control or influence the company’s board or management team. Similarly, it has no intention to make an offer for Vodafone.
“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,” said Hatem Dowidar, group CEO of Etisalat. “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. We see this investment as a good opportunity for e& and its shareholders as it will allow us to enhance and develop our international portfolio, in line with our strategic ambition.”