Sánchez imposes Murtra at the helm of Telefónica and forces control of the operator

The Government of Spain has initiated strategic moves to replace the current president of Telefónica, José María Álvarez-Pallete, who has been at the helm for nine years.

The State Society of Industrial Participations (SEPI) has reportedly secured the necessary support to call an extraordinary board meeting to decide on his dismissal this Saturday, according to THE OBJETIVE.

The Executive's proposal points to Marc Murtra, president of Indra and a figure close to the government, as a replacement.

Context of the Replacement

SEPI acquired 10% of Telefónica's capital in May 2023. This operation aimed to protect Spanish strategic interests against the entry of Saudi Telecom (STC).

The latter hasn't yet completed the derivatives swap to reach its own 9.9% due to a lack of regulatory approvals in Luxembourg.

To ensure Pallete's departure, SEPI needs the support of key shareholders like Criteria Caixa, BlackRock, BBVA, and potentially, STC.

Although Saudi support is taken for granted, it only represents 15% of the capital, making La Caixa's collaboration essential.

In the past, the intervention of Isidro Fainé, leader of Criteria, was crucial to keeping Pallete in his position.

A Planned Replacement

According to sources close to the process, Álvarez-Pallete's replacement has been designed to be amicable and consensual. The current board of directors, mostly composed of figures close to the president, has reportedly been informed of the plans in recent days.

Pallete's management has been marked by the reduction of Telefónica's debt and its modernization, objectives achieved according to his circle.

Marc Murtra, proposed as a successor, has the government's backing and a recognized track record at the helm of Indra, where he led a significant restructuring.

Murtra, historically linked to the Party of the Socialists of Catalonia, is seen as a key figure in the Executive's plans to consolidate a national champion in technology.

Towards a National Technological Giant

Murtra's selection reflects the ambitions of Pedro Sánchez's government to integrate strategic companies like Telefónica, Indra, and Hispasat.

This plan, in development for over a year, seeks to create a large technological corporation that can compete in the European arena and lead the digital market.

Pallete's replacement and the growing state influence in Telefónica could generate tensions in the markets. Governmental interferences are often seen as a risk by investors, who value independence in the management of large corporations.

Something similar happened in Indra, where the Executive imposed its control by displacing shareholders opposed to Murtra's management.

Chronology of the Operation

SEPI began its incursion into Telefónica at the end of 2023, announcing the acquisition of 10% of the capital to balance STC's entry.

In May 2024, it completed the operation and appointed Carlos Ocaña, close to Moncloa, as a representative on the board. Since then, there has been speculation about Pallete's departure, taking advantage of the expiration of his term this year.

The move, carried out discreetly, has taken part of Telefónica's management team by surprise. However, it represents a decisive step by the Government to consolidate its control over the operator and advance its national technological strategy.

The next few hours will be crucial to determine if Álvarez-Pallete's replacement is finalized and what the market reactions will be to this intervention.