UAE telecoms operator e& raises stake in UK's Vodafone Group to 13%

Abu Dhabi-based company now owns more than 3.53 billion shares in the British company

E& is embarking on a strategy of acquiring assets of overseas telecoms companies to broaden its revenue base. Leslie Pableo / The National

The UAE’s biggest telecoms operator, e&, formerly known as Etisalat, has increased its stake in British company Vodafone Group to 13 per cent as part of its international diversification strategy.

The Abu Dhabi-based company now owns an aggregate 3,537.7 million shares in the UK operator, with the transaction executed on Thursday, e& said on Friday in a regulatory filing to the Abu Dhabi Securities Exchange, where its shares are traded.

The financial details of the transaction were not disclosed.

"The investment rationale is unchanged from our announcement on May 14, 2022," e& said.

The UAE company first acquired about 2.76 billion shares, or a 9.8 per cent stake in Vodafone, for $4.4 billion in May, before increasing its shareholding to 11 per cent in early December.

Last month, it raised its stake to 12 per cent as part of efforts to "obtain significant exposure to a global leader, and leverage potential commercial partnership and realise future return on our investment”.

E& is embarking on a strategy of acquiring assets of telecoms companies abroad to broaden its revenue base.

It is pursuing a two-pronged strategy of expanding its telecoms asset base, plus integrating emerging technologies and supporting the rapidly expanding start-up community, chief executive Hatem Dowidar told The National at last year's Gitex Global.

The telecoms industry is going through a major transformation, especially with the advent of new technologies that operators are trying to integrate into their operations to add new revenue lines as competition intensifies.

Hatem Dowidar, chief executive of e&, said the company is expanding its telecoms asset base while integrating emerging technologies and supporting the start-up community. Leslie Pableo / The National

Etisalat, which rebranded as e& in February last year, is in the process of transforming itself into a global technology investment conglomerate.

The company, which currently has operations in 16 countries across the Middle East, Africa and Asia serving more than 156 million customers, has expanded abroad and solidified its stakes in overseas markets in recent quarters.

In December, e& signed a joint venture agreement with South Korea's Bespin Global to set up a business that will provide public cloud services in the Middle East, Turkey, Africa and Pakistan. The two companies each contributed $10 million in initial capital.

In October, e& launched a $250 million venture capital fund as part of its new investment unit, e& capital, to support the technology start-up ecosystem.

In the same month, e& enterprise completed the 100 per cent acquisition of Smartworld, a technology solutions provider and systems integrator in the UAE.

In 2021, the company raised its ownership in Etisalat Investment North Africa to 100 per cent, increasing its effective ownership in Morocco's Maroc Telecom Group to 53 per cent, from 48.4 per cent.