Privatization of Spain's Telefónica is World's Largest ADS Offering

Theme: Clients

In 1987, Goldman Sachs is selected as lead manager on Telefónica of Spain’s IPO on the New York Stock Exchange. It is the first public offering of equity by a Spanish issuer in the US market and the largest ever American Depositary Shares (ADS) offering.

During the 1980s, telecommunications firms such as Telefónica confronted challenges on several fronts, including integration of the European Economic Community and the need to keep pace with technological innovation. Meeting these demands required a large influx of capital that meant that Telefónica would need to look beyond its domestic financial market to global investors.

At the time, Spain’s telephone system was the ninth largest in the world with 14.8 million telephone sets installed. But US equity investors were largely unfamiliar with Spanish businesses, spurring a two-track strategy of presenting the merits of the Spanish market overall and Telefónica’s strong industry position and potential.

On June 11, 1987, the public offering of 16 million ADSs representing 48 million outstanding shares of Compañía Nacional Telefónica de España, was announced, priced at US$20.87. The offering raised just over US$400 million (US$1.06 billion in 2023 dollars) in what was the largest issue of a non-US company in the history of the NYSE at the time.

Goldman Sachs would go on to work on the privatization of several other global telecommunications providers, including those in Mexico (Telmex, 1990),  New Zealand (Telecom Corporation, 1991), Singapore (Singapore Telecom, 1993), Denmark (Tele Danmark, 1994), the Netherlands (KPN, 1994), and Germany’s US$13 billion (US$25 billion in 2023 dollars) Deutsche Telekom deal in 1996, at the time the largest IPO ever.


This article was originally published as part of a series commemorating the 150th anniversary of Goldman Sachs' founding in 1869.