The Spanish government has approved Saudi Telecom Company's (STC) proposed acquisition of a 9.9 percent stake in Telefónica.

In a statement, STC said it received approval from the Spanish Council of Ministers yesterday (November 28). This means STC is able to increase its voting rights from 4.97 percent to 9.97 percent and the right to appoint a board member in Telefónica.

Telefonica-Distrito-C
– Telefonica

STC first announced it had agreed to acquire the stake in Telefónica in September 2023 for $2.25 billion.

The carrier has stated it doesn't intend to push for a majority stake in the Spanish telco.

When STC announced its initial agreement to purchase the stake, it prompted the Spanish government to heavily scrutinize the deal as STC would become the biggest shareholder in the company, surpassing BBVA, BlackRock, and CaixaBank.

However, earlier this year, the Spanish government concluded its purchase of a 10 percent stake in Telefónica, thus ensuring it became the largest shareholder.

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

STC is the biggest mobile operator in Saudi Arabia with 20 million subscribers, and has more than 100 million customers globally, with operations in Bahrain, Kuwait, and Malaysia.

The company is 64 percent owned by the sovereign wealth fund of Saudi Arabia, the Public Investment Fund (PIF).

STC is looking to boost its profile in Europe, and has been linked with other acquisitions this year, including a potential acquisition of Vodafone Portugal, though such a move came to nothing. The carrier has also been linked with a move for European telecom and pay-TV operator United Group BV, which operates in several Balkan markets.