The merger of Orange and MásMóvil is finally approved by Europe: what can we expect now?

Some approvals are missing, but the two telecom companies hope to complete the transaction during March.

It was difficult, but they achieved it. Orange and the MásMóvil group have already received permission from the European Commission to merge your businesses in Spain. The result, as we already know, will be joint venture is valued at 18.6 billion euros and 50% of the shares are controlled by both telecommunications companies.

This approval was obtained after an in-depth investigation by the Commission and is subject to compliance with certain obligations (Facilities), which will move to Digi.

But this is permission This is not the last obstacle which Orange and MásMóvil must overcome in order to start working together in the Spanish market. We’re going to look at the upcoming procedures and what happens next.

Expected from the Spanish government

After collecting a wealth of information and hearing comments from stakeholders and other market players, the Commission approved, under the EU Merger Regulation, the proposed joint venture between Orange and MásMóvil.

The key to unlocking this process was agreement Facilities what Orange and MásMóvil have achieved with Digi, which, according to the Commission, “completely solves the problem competition problems

Margrethe Vestager, executive vice president for competition policy, explained it this way:

“The joint venture between Orange and MásMóvil has jeopardized competition in the retail supply of mobile and fixed internet services in Spain. But the commitments proposed by the parties will allow Digi, the largest and fastest growing virtual mobile network operator in Spain, to replicate the strong competitive pressures exerted by MásMóvil. They will ensure that consumers in Spain continue to benefit from a competitive telecommunications market in terms of prices, quality and 5G connectivity.”

Now that the deal has been approved by Brussels, the next step is to obtain permission from the Spanish government. On the one hand, the Council of Ministers will have to make a decision on this issue. arrival of foreign capital in the new joint venture.

On the other hand, the Ministry of Digital Development will also have to authorize the transfer of 60 MHz of mobile spectrum to Digi. In addition, approval from the Bank of Spain is required for the financial division of the joint venture between MásMóvil and Cetelem.

However, all these procedures should not take too long, since the government has been favorable to this deal. The closure of the operation, according to Orange and MásMóvil, is scheduled for end of first quarter 2024. Or, what is the same, until the end of March.

New telecommunications giant

Once the transaction is closed, a new one will appear joint venture will become leading operator in Spain exceeds Telefónica in market share as it will serve more than 7.3 million broadband Internet customers, more than 30 million mobile customers and more than 2.2 million television customers.

Orange and MásMóvil assure that the joint company will have estimated revenues of more than 7.4 billion euros, EBITDAaL of more than 2.3 billion euros and an enterprise value of 18.6 billion euros. From the fourth year following the closure of the operation, synergies are expected to amount to more than €450 million per year.

Such synergy will be ensured combination of assets, capabilities and equipment from two companies in Spain. We cannot rule out that there will be layoffs or a voluntary retirement plan, but Ludovic Pech, CEO of Orange Spain, tried a few days ago to reassure employees and unions by saying that this synergy will be mainly industrial.

Orange currently operates under three brands: Orange, Jazztel and Simyo, but the MásMóvil group has a wide range of brands such as Yoigo, MásMóvil and Virgin, in addition to the digital brand Pepephone, regional brands Euskaltel, R., Guuk, Embou and Telecable, and also international client brands Llamaya, Lebara, Lycamobile. Therefore, it is more than likely that some of them will soon begin to disappear with the subsequent migration of customers.

Nothing has come out yet name of the new company, corporate image or headquarters, although everything indicates that the latter will be located in La Finca, Pozuelo (current headquarters of Orange) and not in Alcobendas (current headquarters of MásMóvil). The reason is simple: it is easier to transfer almost 2,000 MásMóvil employees than 6,000 Orange employees.

What is already known is part of the organizational structure of the new joint venture, specifically, the highest part. As it became known a few months ago, Meinrad Spenger (CEO of MásMóvil) will take over the position CEO of the new joint venturewhile Jean François Fallagher (former CEO of Orange Spain and current CEO of Orange France) will chair the board of directors and Ludovic Pech (current CEO of Orange Spain) will be the CFO or CFO.

Cover image | Hataka

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