Saudi Telecom Buys $2.25 Billion Stake in Spain’s Telefonica (3)

Saudi Telecom Co. is taking a nearly 10% stake in Spain’s Telefonica SA for roughly $2.25 billion as the struggling Madrid-based carrier prepares to lay out a new strategy for future growth.

The Saudi government-controlled company purchased about 569.3 million shares and is using financial instruments that will altogether hand it a 9.9% interest in Telefonica once approved by regulators, according to a filing posted late Tuesday. The transaction was funded with a combination of the company’s own resources and bank debt. Telefonica’s American Depositary Receipts rose 2.05% on Tuesday in New York.

The acquisition is bound to draw ...