UAE’s e& raises stake to 14% in Vodafone

The telecom operator, which initially acquired a 9.8 per cent stake in Vodafone for $4.4bn in May 2022, said its investment rationale remains unchanged

by Kudakwashe Muzoriwa

March 1, 2023

UAE telecoms operator e& has increased its stake in Vodafone to 14 per cent, as part of the company’s broader strategy to develop opportunities for commercial partnerships.

The telecoms service provider, which initially acquired a 9.8 per cent stake in Vodafone for $4.4bn in May 2022, said its investment rationale remains unchanged from the initial deal that was closed nearly a year ago. The state-controlled company, formerly known as Etisalat, further increased its shareholding to 11 per cent late last year.

e& increased its stake in Vodafone to 12 per cent in January to “obtain significant exposure to a global leader, leverage the potential commercial partnership and realise future return on our investment”.

With the latest transaction, e& now owns 3.8 billion shares in London Stock Exchange-listed Vodafone pushing the Abu Dhabi-based technology group ahead of other investors including BlackRock, the Vanguard Group and HSBC Holdings.

e& said it wants to remain a long-term investor and will not make an offer for the rest of Vodafone.

e& Group’s growth strategy

e& has stepped up deal activity after years of focusing on organic growth. The company raised its ownership in Etisalat Investment North Africa to 100 per cent in 2021, increasing its effective ownership in Morocco’sMaroc Telecom Group to 53 per cent, up from 48.4.

In March 2022, the technology group announced that it had offered to increase its stake in Saudi Arabia’s Etihad Etisalat (Mobily) to 50 per cent and one share in a bid to expand and optimise its investment portfolio.

Read: UAE’s e& enterprise completes acquisition of Smartworld

e& signed a joint venture with South Korea’s Bespin Global in December 2022 to set up a business that will provide public cloud services in the Middle East, Africa, Turkey and Pakistan. The company also bought Service Souk DMCC “ServiceMarket” in February 2023, acquiring 100 per cent of the shareholding of the online marketplace as it seeks to drive the diversification of its business.

With a market capitalization of $60.3bn (Dhs222bn) as of March 1, 2022, e& is present in 16 countries across the Middle East, Asia and Africa.

e&’s new identity

e& unveiled its new brand identity in February 2022 as the telecoms group looks to formulate a more progressive and resilient business model that sustains its business ambitions, promotes new ventures and partnerships, and maximises value across its operations.

The carrier’s full-year net profit surged by 7.4 per cent to Dhs10bn while its revenues dropped by 1.7 per cent to Dhs52.4bn after “foreign exchange rate volatility in international markets” placed pressure on earnings reported in dirhams.

e& was crowned the most valuable telecom brand in the Middle East and Africa, according to the 2023 Brand Finance Global 500 Report. It achieved remarkable business growth in 2022, with its portfolio of brands now exceeding a total value of $14bn.

Also read: UAE’s etisalat by e& named strongest Middle Eastern brand

The company also retained an AAA rating from Brand Finance and is rated among the top three telecom brands in the world, thanks to its market reach and operational capabilities.

The group has made significant investments in artificial intelligence, blockchain, virtual reality, augmented reality, cloud computing and other innovative technologies to support the next wave of digital transformation.