Vodafone and its Emirati shareholder will work more together

Confirmed for a few weeks, the new general manager of Vodafone is not idle. On the front line to complete – by the end of the month according to the “Financial Times” – the long-awaited merger of the operator’s mobile activities with that of CK Hutchinson in the United Kingdom, Margherita Della Valle is also looking after her relations with her first shareholder.

Having become the largest shareholder of the British telephony group a year ago, Emirates Telecommunications Group (e&) announced with Vodafone this Thursday, May 11 the signing of a “strategic partnership” agreement.

The Emirati e&, “reference shareholder”

On the operational level, the two global telecom giants will think about joint offers on the professional market, will ess the opportunity to pool their purchases from their suppliers, will share certain network infrastructures and will cooperate on technological issues such as OpenRAN, intended to replace equipment with interoperable software. Both present in Africa and the Middle East, the two groups are only competitors in Egypt.

Above all, the e& group is officially designated “Vodafone’s reference shareholder” in the press release written by the two companies. The first telecom operator in the Middle East had invited itself to Vodafone by buying back 9.8% of the capital in May 2022. The former Etisalat then gradually increased its stake in the British operator to now hold 14.6% of the company.

The appetite of the former Etisalat

Under the terms of the agreement, the Emirati group’s chief executive Hatem Dowidar will join Vodafone’s board of directors as a non-executive director, and will remain so as long as e& retains this stake. The company will be able to benefit from a second seat on the board of directors if its participation exceeds 20%.

There is nothing hypothetical about this scenario, as the group, according to the British press, has indicated to investors that it was ready to own between 20 and 25% of the capital of Vodafone. The idea is to ensure “enough influence” over the future of the operator in strategic difficulty.

Liberty, Xavier Niel… the investors at the bedside of Vodafone

However, the agreement between Vodafone and e & also limits the appetite of the Emirati group. e& undertakes not to increase to more than 24.99% of Vodafone. Conversely, he also undertakes not to sell more than 3% of Vodafone shares per twelve-month period over the next two years.

The title of Vodafone fell by 2.42% to 90.51 pence Thursday around 4:30 p.m. on the London Stock Exchange, accentuating its difficulties in convincing the markets in recent years. Under pressure from activist investors, Vodafone recently withdrawn from the Hungarian market, surrendered its Vantage telecom towers and his every move is monitored in Spain and Italy.

This situation arouses the interest of many investors. Last February, the American Liberty Global acquired 5% of the capital of Vodafone. Unlucky candidate for the takeover of Vodafone Italia, the Frenchman Xavier Niel, owns 2.5% of the British group.