Spain Counters Saudi Telecom with €2 Billion Stake in Telefonica

Telefonica shares see significant rise following the government's announcement, marking a shift in Spain's market intervention approach.

Spain's government investment vehicle, Sepi, plans to buy up to 10% of Telefonica's shares, a stake that could be valued at more than €2 billion ($2.2 billion).
This move is seen as a counter to Saudi Telecom Co.'s earlier investment announcement, which could make the Middle Eastern state-backed company Telefonica's largest shareholder.
Telefonica's shares rose 4.6% to €3.73 at 9:50 a.m. in Madrid on Wednesday after the announcement, marking the biggest intraday jump since January 2021.
The Spanish government's decision to buy a stake in Telefonica marks a major shift in its approach, as it has been more reluctant in recent years than other European nations to intervene in markets and take ownership of corporations.
Telefonica is considered strategically important in Spain as it provides services to the military and the defense ministry.