According to Orange, the deal establishes a sustainable player with the financial capability to continue investing in next-generation networks to benefit the market, consumers, and enterprises in Spain
Telecom operators Orange Spain and Masmovil merge their Spanish operations. (Credit: Alberto Adán from Pixabay)
French telecommunications firm Orange and Spanish telecom operator Masmovil have completed their previously announced €18.6bn merger deal which enables the parties to combine their operations in Spain.
The enlarged entity in Spain will be operated as a 50:50 joint venture (JV) between the parties. Orange Spain and Masmovil’s accounts will be consolidated at the level of a newly registered legal entity.
Announced in July 2022, the transaction is based on an enterprise value of €7.8bn and €10.9bn for Orange Spain and Masmovil, respectively.
The preliminary closing accounts estimate the respective proceeds at closing to be at nearly €4.4bn for Orange Spain and about €1.65bn for Masmovil shareholders.
As per the revised estimates, the newly merged entity is projected to generate synergies of over €490m per year by the fourth year after the closing of the deal.
The board of directors of the JV has confirmed the appointment of Masmovil CEO Meinrad Spenger as the CEO of the combined business.
Spenger said: “With our JV, the Spanish telecom market has now a stronger company with the capacity to innovate and invest and to serve our clients in the residential and business segment as their trustful partner.”
According to Orange, the deal establishes a sustainable player with the financial capability to continue investing in next-generation networks for the sake of the market, consumers, and enterprises in Spain.
The telecom operator also said that the new entity, which has more than 37 million broadband and mobile lines, has become a dominant force in the Spanish telecoms market in terms of customers.
Orange CEO Christel Heydemann said “By creating a stronger and more sustainable player, the joint venture launched today will help drive innovation and investment in high-speed broadband and digital services in Spain.
“This is clearly a positive step forward in our overall vision for a strong and thriving telecoms industry in Europe.”
Goldman Sachs Bank Europe and Lazard Frères served as lead financial advisers to Masmovil and Orange, respectively, for the transaction.