Emirates Telecommunication Group Company (e&) has increased its stake in Vodafone Group, a British telecommunications company, to 14.6% through a series of investments. As a result, e& will now have a say in board matters and form a strategic relationship with Vodafone that will bring the two companies closer together in certain areas of their businesses.
Under the terms of the agreement, Hatem Dowidar, the Group Chief Executive Officer of e&, will join the Vodafone Board as a non-executive director, as long as e& maintains its current shareholding of 14.6%.
If e&’s shareholding exceeds 20%, the company will also have the ability to nominate a second non-executive director, independent of e&, subject to regulatory approval.
Both e&’s nominee and the independent nominee will be subject to an annual election by Vodafone’s shareholders and may be replaced from time to time by e&, subject to agreed procedures.
Read more: e& further raises Vodafone stake
e& has agreed not to acquire more than 24.99% of Vodafone’s shares, and not to dispose of these shares for two years (except for a maximum of 3% shares during each 12 months).
Additionally, e& will be unable to requisition a shareholder meeting or propose any resolution to be put forward at a shareholder meeting.
In the exchange statement, e& stated that “The strategic relationship enables collaboration across a broad range of growth areas, as e& and Vodafone may be able to benefit from each other’s respective operational scale and complementary geographic footprint.”
The two companies have also agreed to explore jointly offering cross-border digital services and solutions to multinational customers and public sector organizations, including fixed and mobile connectivity, mobile private networks, IoT, cybersecurity, and cloud-based services, in the Enterprise sector.
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