Düsseldorf, London The Emirati company Etisalat has acquired a 9.8 percent stake in the telecommunications provider Vodafone as part of its global expansion. Etisalat will thus become the largest single shareholder of Vodafone ahead of the US asset managers Blackrock and Vanguard and the British bank HSBC.
As the state-controlled group from Abu Dhabi announced on Saturday, they want to keep the $ 4.4 billion stake in the British group for the long term and are not interested in taking over any other Vodafone shares. They also did not want to exercise any entrepreneurial influence or claim a seat on the management board, they said.
The entry of the Gulf company, known under the “e&” brand, comes at a time when Vodafone’s management, under Chief Executive Nick Read, is under intense pressure from shareholders. Cevian, Europe’s largest activist investor, is pushing to drive consolidation of European business, divest from divisions and improve returns.
Although Etisalat expressed his confidence in the Vodafone management, analysts expect that the pressure on Read and his team will now intensify further. “A company like this only takes a significant minority stake if it believes it can make a big impact,” said Karen Egan of research firm Enders Analysis in Dundee. Vodafone chief executive Read said in February that the company was seeking mergers with rivals in several European markets.
Last Wednesday, it became known that the British group apparently wants to push ahead with the consolidation of the domestic mobile market. Vodafone has started negotiations on a merger of its British business with Three UK, the “Financial Times” reported, citing people familiar with the matter. Further details of the potential deal were not immediately available. The mobile operator Three UK is part of the Hutchison Group from Hong Kong. Vodafone rejected a sale of its Italian mobile phone business to the French investor Iliad in February. Read will present its annual report for 2021 on Tuesday and will then have to ask further questions about the strategy.
Gulf investor is on course for expansion
Like its big neighbor and competitor Saudi Arabia, the Emirates are trying to prepare their economy for a time after oil revenues. Both Opec countries are investing 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,” Etisalat CEO Hatem Dowidar said in a statement.
“Our investment offers the opportunity to make a significant contribution to [einer führenden] to acquire a global telecommunications brand, a company we know well,” it continued. Dowidar had previously managed the Vodafone business in Egypt. Etisalat has around 160 million mobile customers in the Middle East and brings it to a market value of a good 70 billion euros. Vodafone is listed at around 37 billion euros.
In mid-April, it was announced that Philippe Rogge, who currently heads Microsoft’s Eastern Europe business, will become the new head of Vodafone Germany. On July 1, Rogge will replace the current CEO Hannes Ametsreiter, who has led the British telecommunications group’s highest-revenue subsidiary since October 2015.
