Zegona finalizes the purchase of at least 50% of Vodafone's business in Spain, according to 'Bloomberg'

MADRID, 29 Oct.

Zegona finalizes the purchase of at least 50% of Vodafone's business in Spain, according to 'Bloomberg'


Zegona is finalizing the purchase of at least 50% of Vodafone's business in Spain in an operation in which the British fund values ​​the operator's subsidiary at around 5,000 million euros and which could be announced "in the coming days", according to information from the US agency 'Bloomberg'.

However, despite the fact that the talks are in an "advanced phase", they could still be "delayed or even fail", clarifies the information, on which Vodafone has refused to comment, according to sources consulted by Europa Press.

On September 22, Zegona confirmed in a statement the existence of "conversations" with Vodafone to acquire the operator's business in Spain, although at that time it also stressed that there was no certainty that the operation would be carried out.

Zegona also indicated then that it was in talks with different banks to obtain financing for this possible operation, while emphasizing that its closure would be subject, among other things, to "an agreement on the final terms with Vodafone" and the conclusion of the audit process ('due diligence') of the business of the Spanish subsidiary of the operator.

Regarding this, the economic newspaper 'Expansión' announced this Saturday that the British fund has already obtained this financing and that the operation will be carried out entirely through debt to subsequently obtain capital to replace part of the credits.

Vodafone put its Spanish subsidiary under strategic review last May and since then different information has emerged regarding the interest of different funds in acquiring the business.

Beyond Zegona, the consortium led by the venture capital fund RRJ Capital would also be studying the possibility of making an offer of around 5,000 million euros for the subsidiary.

The venture capital firm RRJ Capital is directed by former Goldman Sachs banker Richard Ong and according to sources familiar with the process to 'Bloomberg', the fund has already obtained financing for the possible operation.

"Deliberations are ongoing and the RRJ-led group could still decide not to proceed with a deal, sources said," the information added.

RRJ Capital has already invested €500 million in 2021 in Vantage Towers, Vodafone's European mobile tower unit, and still has a nearly 3% stake in the company.

To those of Zegona and RRJ Capital, are also added the names of other possible buyers for Vodafone Spain, such as Apollo, Apax, Illiad or Liberty.

In this context, Vodafone is studying several options for its business in Spain, ranging from a possible sale of the subsidiary, for which it is listening to the market, to getting rid of part of its fixed network in the country.

However, both routes will depend on how their results evolve in Spain and also on the possible conditions that Brussels imposes on the merger of Orange and MásMóvil, according to what sources familiar with the situation have told Europa Press.

Market sources have indicated that the imposition of some "tough" 'remedies' by Brussels to approve the merger of Orange and MásMóvil in Spain would be an incentive for a possible total or partial sale of the subsidiary.

"Brussels' decision on the merger of Orange and MásMóvil has an impact not only in Spain, but also on the entire sector in Europe. A ruling with harsh 'remedies' would curb expectations of consolidation in other markets and growth. In addition, it would mean another setback in telecom prices, which have dropped 45% in the last ten years," the sources added.

On the contrary, a merger without conditions would help all operators - both in Europe and in Spain, the sources clarify - to grow more and also a "faster recovery of Vodafone in Spain", which would invite the company to reconsider the need for a possible sale of the subsidiary.