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UAE-based Emirates Telecom buys 9.8% stake in Vodafone for $4.4 bn

The transaction is in line with e&’s ambition to be a global player in telecom and technology and to increase its exposure to international markets. (REUTERS)Premium
The transaction is in line with e&’s ambition to be a global player in telecom and technology and to increase its exposure to international markets. (REUTERS)

  • The Emirati-based multinational telecom services provider's expects the investment in the United Kingdom headquartered Vodafone to gain significant exposure to a world leader in connectivity and digital services.

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Emirates Telecommunications Group Company PJSC “e&" (Etisalat Group) on Saturday announced the acquisition of approximately 2,766 million shares in Vodafone Group Plc aggregating to $4.4 billion. The shares represent 9.8% of Vodafone's issued share capital. The transaction is in line with e&’s ambition to be a global player in telecom and technology and to increase its exposure to international markets.

The Emirati-based multinational telecom services provider's expects the investment in the United Kingdom headquartered Vodafone to gain significant exposure to a world leader in connectivity and digital services.

Hatem Dowidar, the Group CEO of e&, said, “Vodafone is one of the leading businesses at the heart of digital communications in Europe and Africa with a compelling business offering critical connectivity and digital services."

Dowidar said, "Our investment represents a unique opportunity to acquire a significant stake in one of the leading and strongest global telecom brands, and a company that we know well. We are looking forward to building a mutually beneficial strategic partnership with Vodafone with the goal of driving value creation for both our businesses, exploring opportunities in the rapidly developing global telecom market, and supporting the adoption of next-generation technologies."

In its filing on the Abu Dhabi Securities Exchange, e& said that Vodafone's strong reputation for being a leading digital-first operator, underpinned by its rigorous approach to corporate governance and well-regulated global footprint, makes it an attractive opportunity for e& at this current time.

e& believes this investment as highly efficient use of its strong balance sheet at a compelling and attractive valuation with strong currency diversification benefits.

According to e&, the deal provides a clear opportunity to realize future value through potential capital gains and dividends. It may also lead to possible commercial partnerships in the areas of R&D, technological applications, and procurement.

"We see this investment as a good opportunity for e& and its shareholders as it will allow us to enhance and develop our international portfolio, in line with our strategic ambition," Dowidar added.

e& said they are fully supportive of Vodafone’s Board and existing management team and its current business strategy announced in November 2021.

Also, e& does not seek Board representation of Vodafone and said, it "is confident about the company’s ability to unlock value from its organic business activity and other potential strategic transactions."

Furthermore, e& plans to be a long-term shareholder in Vodafone and does not plan to take any control or influence the business operations of the company.

"e& plans to be a long-term and supportive shareholder in Vodafone and is not seeking to exert control or influence the company’s Board or management team. Similarly, e& has no intention to make an offer for Vodafone," it said in the filing.

On Friday, at ADX, e& shares closed at 31.50 AED up by 1.86%.

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