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The Spanish government has approved Saudi Arabia鈥檚 STC Group to increase its stake in Telef贸nica to 9.97 percent, following a year-long process of negotiations and regulatory scrutiny.

On Thursday, Spain鈥檚 Economy Minister Carlos Cuerpo confirmed that the Council of Ministers had authorised the move, allowing STC to raise its voting rights from 4.97 percent and appoint a representative to Telef贸nica鈥檚 board.

The decision came after a battle for influence in Telef贸nica, a company deeply embedded in Spain鈥檚 national security and telecoms infrastructure.

STC, majority-owned by Saudi Arabia's sovereign wealth fund, has been attracted to the Spanish company due to the strategic nature of its operations, which include involvement in defence. 听

But Cuerpo insisted that the approval followed "an exhaustive analysis" by Spanish authorities, addressing national security concerns related to telecoms infrastructure, as well as safeguarding Telef贸nica鈥檚 operational autonomy.

STC CEO Olayan Al-Wetaid welcomed the decision, framing the approval as a reflection of STC鈥檚 position as a "long-term strategic partner" to Telef贸nica.

鈥淎s one of the company鈥檚 largest shareholders, we remain confident in Telef贸nica鈥檚 leadership and strategic outlook, and we look forward to working together to unlock value for all shareholders,鈥� he added.

Telef贸nica CEO Jos茅 Mar铆a 脕lvarez-Pallete L贸pez acknowledged the approval but noted that STC had not introduced new developments since announcing its stake last year.

鈥淥ne of Telef贸nica鈥檚 great strengths is its shareholders, large and small, who provide stability and support to the operator and reflect the confidence of investors in Telef贸nica鈥檚 strategy,鈥� he said.

In response to STC鈥檚 acquisition, Spain鈥檚 government increased its own stake in Telef贸nica through the Sociedad Estatal de Participaciones Industriales (SEPI), which now holds a 10 percent share.

Although Minister Cuerpo declined to speculate on whether Spain would increase its stake further, he indicated that the approval process had been carefully managed to protect national interests.

Shares in Telef贸nica rose 1 percent following the announcement.