UAE-based e& (formerly Etisalat) bought a 9.8 per cent shareholding in Vodafone Group for $4.4 billion as part of an ambition to increase its exposure to markets outside of its home region.

In a statement, e& backed Vodafone’s current leadership team adding it doesn’t have designs on a board seat and has no intention of launching a full buyout bid.

Alongside benefits from an investment perspective, e& noted its new relationship with Vodafone provided an opportunity for commercial partnerships in areas including R&D, technological applications and procurement.

The company added the buy was “fully aligned to e&’s announced ambition to be a global player in telecom and technology and to increase its exposure to international markets”.

Hatem Dowidar, e& CEO, said it aimed to build a “beneficial strategic partnership with Vodafone with the goal of driving value creation for both our businesses, exploring opportunities in the rapidly developing global telecom market and supporting the adoption of next-generation technologies”.

In its statement acknowledging the move, Vodafone noted it looked forward to building a long-term relationship with the shareholder. It plans to provide a strategy update in its annual results announcement tomorrow (17 May).

Citing data on its platform for traders, Bloomberg stated the buy makes e& Vodafone’s largest shareholder ahead of BlackRock, Vanguard Group and HSBC Holdings.

CCS Insight director for consumer and connectivity Kester Mann added e&’s backing of the management at Vodafone could “bring temporary relief to under-pressure CEO Nick Read amid mounting influence from activist shareholder Cevian Capital”.

“The presence of a new, wealthy shareholder could offer welcome financial support for Vodafone’s fixed and mobile investments across its broad footprint. It could also bolster efforts to secure deals in competitive European markets such as the UK, Italy, Spain and Portugal, something Cevian is increasingly pushing for.”