Telefonica mulls selling stake in high-growth tech division
Investing.com | Editor Ambhini Aishwarya
Published Oct 05, 2023 09:08AM ET
Telefonica (NYSE:TEF) SA's CEO, Jose Maria Alvarez-Pallete, is contemplating the sale of a stake in Telefonica Tech, the unit that provides cloud operations management on Microsoft Corp (NASDAQ:MSFT).’s Azure and Amazon (NASDAQ:AMZN) Web Services, as well as cybersecurity services. Despite its smaller size compared to Telefonica's legacy telecommunications business, Telefonica Tech has been outpacing the broader group in terms of revenue growth. The potential sale could value the tech division at over €2 billion (EUR1 = USD1.0499).
The news comes as Telefonica's shares have experienced a significant downturn, with a 60% drop recently. This move could be seen as an attempt to generate capital and refocus the company's efforts on its more profitable sectors.
In a recent development attesting to the potential of Telefonica Tech, Saudi Telecom Co. acquired a 9.9% stake in Telefonica. The Saudi telecom giant was particularly drawn by the promising prospects of Telefonica's Tech division.
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