The Spanish government has concluded its purchase of a 10 percent stake in Telefónica.

It was purchased through the state-holding company Sociedad Estatal de Participaciones Industriales (SEPI).

In a statement this week, SEPI said it has informed Spain's National Securities Market Commission (CNMV) of its purchase.

The move means that the Spanish government has overtaken Saudi Arabian telecoms company STC Group to become the largest shareholder in the company.

SEPI has moved to increase its stake in Telefónica to stave off interest from STC, which has insisted it's not interested in acquiring a majority stake in the telco.

"With a vocation for permanence, SEPI's participation provides greater shareholder stability to the company to achieve its objectives and contributes to the protection of the strategic capabilities of a key company in the telecommunications sector and a determining factor in most of the industrial capabilities and areas of knowledge that affect the essential interests of defense and national security," said SEPI in a statement.