Emirates Telecommunications Group company PJSC, now known as e&, has acquired a 9.8% stake in Vodafone for $4.4 billion, it said on Saturday.
The move comes days after e& announced it would expand into new markets in Africa, Europe and Asia, as well as into areas outside of telecoms like fintech to spur growth.
Vodafone, like all mobile operators, is struggling in its more mature markets, where competition and regulation have pushed prices down.
The group’s net debt has reached 44.3 billion euros ($46.1 billion) and its chief executive, Nick Read, is under pressure to simplify his portfolio and improve returns after the share price has plummeted since his acquisition in 2018 fell by more than 20%.
Vodafone said it looks forward to building a long-term relationship with e& from the United Arab Emirates.
“We continue to make good progress on our long-term strategic plans and will provide an update in our FY22 results announcement on May 17,” it said in a statement.
E& said it made the investment to gain “significant access to a global leader in connectivity and digital services.”
It has no intention of making an offer to buy Vodafone, it added, saying it fully supports the company’s current business strategy, as well as its board and existing management team.
“We see this investment as a good opportunity for e& and its shareholders as it will allow us to improve and further develop our international portfolio in line with our strategic ambitions,” said CEO Hatem Dowidar.
The UAE-based company recently split its business into consumer services-focused e& life, e& Enterprise, which provides digital services to governments and businesses, and telecom arm Etisalat, which according to its CEO is the seventh largest in the world by market capitalization.
