Etisalat, the UAE's biggest telecom operator, has acquired a 9.8 per cent stake in British mobile carrier Vodafone Group for $4.4 billion as it seeks to diversify operations globally.
Emirates Telecommunication Group, formerly known as Etisalat and now rebranded as e&, has acquired approximately 2,766 million shares in Vodafone, The National reported.
"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," Hatem Dowidar, group chief executive of Etisalat, 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."
The company, based in Abu Dhabi, was founded in 1976 and is the UAE's oldest telecom business. It has operations in nearly 16 countries across the Middle East, Asia and Africa, serving more than 156 million customers.
In February this year, Etisalat rebranded as it sought to transform into a global technology investment conglomerate.
The UAE telecom operator does not seek board representation on Vodafone and does not intend to make an offer for the company, the statement said.
"Etisalat sees this investment as a highly efficient use of its strong balance sheet at a compelling and attractive valuation with strong currency diversification benefits. It provides a clear opportunity to realise 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," according to the statement.
Vodafone's reputation for being a digital-first operator, underpinned with its rigorous approach to corporate governance and well-regulated global footprint, makes it an attractive opportunity for e& at this current time, the statement said.