March 8, 2022

The two companies say it is an “attractive” operation, as the assets of Orange Spain (without its mobile towers) reach 8.1 billion euros and those of MásMóvil 11.5 billion euros, as specified in a statement.

The two sides hope to close the operation in the second quarter of the year and obtain regulatory approval in mid-2023, in a merger that will serve to test whether the European Commission has relaxed its competition criteria, as it involves the merger of the second market operator and the fourth.

The resulting entity will not be consolidated in the balance sheet of either group and the parties reserve the right to a public offer of sale in which the French operator would have the right to take control and consolidate the entity optionally.

Both the President and CEO of Orange, Stéphane Richard, and the CEO of MásMóvil, Meinrad Spenger, have highlighted the importance that the company acquires with this operation to make investments in technologies such as 5G.

Orange’s financial adviser in charge of the negotiations is Lazard, while Goldmans Sachs Bank Europe is in charge of MásMóvil, which has also had BNP Paribas as its financing advisor.

‘Overtaking’ Telefonica

If the merger materializes, the new group would be the first in Spain with 7.1 million users of fixed services and 20.2 million mobile lines. Telefónica has 5.8 million fixed broadband and just under 16 million mobile. However, in revenue the joint venture it would be below Telefónica, with a turnover of 7.5 billion euros and an adjusted gross operating profit of approximately 2.2 billion euros.

The new group’s fiber optic network would exceed 16 million real estate units and the 5G spectrum in MásMóvil’s 3.5 GHz band would strengthen Orange’s leadership in this area.

With the merger, the parties hope to achieve an industrial reach that will facilitate the deployment of 5G and generate synergies of more than 450 million euros from the third year following the closure of the operation.