Masorange and Vodafone are in talks to form a joint broadband company

Masorange and the new Vodafone controlled by a British company Zegona, are negotiating establishment of a fixed broadband joint venture (Netco or network company) participation of both parties, which would allow them to achieve synergy andeven get a mechanism to monetize these shares in the future by selling a stake in these shares. Netko third party investors such as infrastructure investment funds. Negotiations have been ongoing for some time, so if an agreement is finally reached (which is not certain), it could be reached in the coming weeks, according to sources familiar with the process, EXPANSIÓN reported. Sources Zegona They note that the British company has always been very clear “about its interest in possible network sharing opportunities in Spain.” Zegona has been and continues to be in discussions with all key market players regarding potential network sharing relationships and is open to pursuing post-acquisition value creation opportunities Vodafone Spain was closed”. Sources Masorange They refused to comment on this information.

In any case, in addition, the acquisition Vodafone Spain To Zegona has not yet been closed and therefore all commercial activities remain under the control of the Vodafone group.

Sources interviewed indicate that the agreement will create a company with assets of about 10 or 11 million units of real estate transmitted through broadband networks, which will make this Netco one of the most important companies in Spain in this business segment at the height of what it has built Onivia, independent firm owned by funds Macquarie, Abrdn and Arjun Partnerswhich is currently underpinned by the purchase of approximately 6 million homes converted to fiber for Digi.

To this new Netko Together, each of the two operators will contribute a share of their broadband networks and customers’ assets in Spain, including the FTTH fiber access circuits that Orange and Vodafone jointly deployed as part of their alliance, announced in March 2013 and planned to reach 6 million. homes last year, although the number ended up being just over 3 million as each company opted for separate solutions: Vodafone acquired Ono and Orange acquired Jazztel.

Possibility of monetization

One of the opportunities created by the creation of a Netco with its own legal nature is to be able to sell shares in this new joint venture to investment groups such as infrastructure funds, insurance companies or pension funds, thanks to the income they generate from it. the type of companies that use them. So both Masorange How Vodafone They could obtain resources with which to reduce the level of debt of both countries, which is quite high. Masorange was born with a debt of over 12 billion euros, a result of the debt he contributed More detailsMobile along with mega dividends that were distributed between two groups of shareholders (1.650 million for shareholders More detailsMobile and 4.2 billion for Orange, that is, the French parent company of the group). In Vodafone’s case, the purchase of Zegona was almost entirely financed by €5 billion of debt, although Zegona closed a capital increase of €300 million.

After the sale of the stake, the most important shareholder of the new Netco will be Masorangewhile Vodafone will remain with less than its partner and investment partner’s share.

The company itself has highlighted the possibility of creating Netco by combining Vodafone’s fixed network assets and customers with Orange customers. Zegona in the prospectus he submitted to the London Stock Exchange on the occasion of the acquisition of the Spanish operator. So Zegona put forward a maximum hypothesis by combining all its network assets, as a result of which Zegona It stated that it was possible to build a very large company with coverage of 16 million homes and pure fiber-to-the-home (FTTH) access to 7.5 million. This hypothetical joint venture Vodafone-Orange, Zegona The company estimates annual turnover of €900 million and EBITDA of €800 million, which would enable Vodafone to “create value” of approximately €3,500 million.