DEAL: e&, formerly known as Etisalat Group, acquires 9.8% stake in Vodafone for $4.4 billion

The UAE’s biggest telecoms operator, e&, which was formerly known as Etisalat Group, has acquired a 9.8% stake in Vodafone Group Plc, a British mobile carrier for $4.4 billion.

The deal makes the UAE-based company the largest shareholder in Vodafone, ahead of BlackRock Inc., the Vanguard Group Inc., and HSBC Holdings Plc, according to Bloomberg data. In total, the group acquired approximately 2,766 million shares in Vodafone at $1.59 (130 pence), reflecting a premium of about 10% to its closing price of 117.82 pence on Friday.

Meanwhile, the state-controlled group said it is not planning to make an offer for the rest of Vodaphone, though it revealed that it wants to remain a long-term investor.

What they are saying about the deal

Hatem Dowidar, group chief executive of e& said the deal provides a number of opportunities for the group in future.

He said, “e& 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.”

Noting that the business is at the centre of communication across major continents, it said that the deal would help to drive value creation for both companies.

“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.

“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,” he added.

What you should know

  • e& was initially founded in 1976 and is the UAE’s oldest telecoms business
  • The company, based in Abu Dhabi has operations in nearly 16 countries across the Middle East, Asia and Africa and serves more than 156 million customers.
  • With the aim to transform into a global technology investment conglomerate, E& transformed in February this year.
  • The company had in October last year, signed a binding agreement with G42, Abu Dhabi-based artificial intelligence services provider, to merge its data centre services and create the UAE’s largest data centre provider.
  • It also acquired an additional stake in Maroc Telecom Group, increasing its ownership from 48.4 per cent to 53 per cent in August 2021
  • Meanwhile, Vodaphone extends across more than 20 countries serving over 300 million wireless customers in U.K., Germany, Italy, Spain, Africa and India.

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