Dusseldorf, London Etisalat, the Etisalat company, has acquired a 9.8 percent stake in telecom provider Vodafone as part of its global expansion. This makes Etisalat the largest single shareholder in Vodafone, ahead of the US asset managers Blackrock and Vanguard and the major British bank HSBC.
As the state-controlled group from Abu Dhabi announced on Saturday, they want to keep the 4.4 billion dollar stake in the British group for the long term and are not interested in taking over further Vodafone shares. They also do not want to exercise any entrepreneurial influence or claim a seat on the management board, it said.
The entry of the company known under the brand “e&” from the Gulf comes at a time when the Vodafone management under CEO Nick Read is under strong pressure from the shareholders. Cevian, Europe’s largest activist investor, is pushing to consolidate its European business, divest businesses and improve profitability.
Although Etisalat expressed his confidence in Vodafone management, analysts expect that the pressure on Read and his team will now increase further. “Such a company will only take a significant minority stake if it believes it can have a major impact,” said Karen Egan of Dundee-based research firm Enders Analysis. Vodafone boss Read said in February that the company was looking to merge with competitors in several European markets.
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It was announced last Wednesday that the British group apparently wants to push ahead with the consolidation of the domestic mobile communications market. Vodafone has started negotiations to merge its UK business with Three UK, the Financial Times reported, citing people familiar with the matter. Further details of the possible deal were not initially known. The mobile operator Three UK belongs to the Hutchison Group from Hong Kong. In February, Vodafone refused to sell its Italian mobile phone business to French investor Iliad. Read will present its full-year results for 2021 on Tuesday, after which it will have to face further questions about strategy.
Investor from the Gulf is on course for expansion
Like its big neighbor and competitor Saudi Arabia, the Emirates are trying to prepare their economy for a post-oil era. Both OPEC countries invest their assets in growing industries outside the country, such as e-mobility or semiconductors. “The investment was a unique opportunity to acquire a significant stake in a leading and globally strong telecommunications brand,” said Etisalat CEO Hatem Dowidar in a statement.
“Our investment offers the opportunity to acquire a significant stake in [einer führenden] global telecoms brand, a company we know well,” it said. Dowidar used to run Vodafone’s business in Egypt. Etisalat has around 160 million mobile customers in the Middle East and has a market value of around 70 billion euros. Vodafone is listed at around 37 billion euros.
In mid-April it became known that Philippe Rogge, who is currently in charge of Microsoft’s Eastern European business, will become the new head of Vodafone Germany. On July 1, Rogge will replace the current CEO, Hannes Ametsreiter, who has headed the British telecommunications group’s top-selling national company since October 2015.
With agency material.
More: Vodafone Germany boss Hannes Ametsreiter stops.