Vodafone shares climb following UAE telecoms group’s £3.6bn swoop
Vodafone shares are up nearly four per cent this morning after the company revealed over the weekend that Emirates Telecommunications Group, also known as e& and Etisalat, snapped up a 9.8 per cent stake in the telecoms giant.
The $4.4bn (£3.6bn) move makes the United Arab Emirates state-controlled firm the biggest shareholder in the company, and is a significant move for Vodafone chief Nick Read.
From e&’s perspective, group CEO Hatem Dowidar said the 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”.
While Dowidar said he was looking forward to “building a mutually beneficial strategic partnership”, it is understood that the telecoms company doesn’t intend to buy Vodafone and fully supports the company’s board.
The move puts enhanced pressure on Vodafone to accelerate market consolidation.
TMT analyst at PP Foresight Paolo Pescatore weighed in on the recent move and told City A.M. this afternoon: “The move itself will raise eyebrows and may lead to some tension with other shareholders who are keen to see Vodafone consolidate in key markets.”
“There will now be opportunities for both Etisalat and Vodafone to work more closely to bring greater efficiencies and launch new products in more products globally”, he explained.
City A.M. reported earlier this week that Vodafone, the UK’s third largest mobile network operator, had reignited merger talks with rival Three.