The deal must still be approved by the Spanish competition authority, but is widely expected to sail through
The Spanish newspaper, El Economista, reports that Europe’s Directorate-General (DG) for Competition has approved Zegona Communications’ proposed acquisition of Vodafone Spain. The acquisition was announced at the end of October by Zegona, a British investment fund, which has offered €5 billion for Vodafone’s assets in Spain.
The DG, part of the European Commission, said it had found “insufficient indications to initiate an in-depth investigation”.
Next Zegona must obtain permission from Spain’s National Commission on Markets and Competition (CNMC) for the transaction.
If it is successful, Vodafone will be paid €4.1 billion in cash and up to €900 million in preferential shares. The CNMC is not expected to obstruct the deal so it is expected the shares will be repaid no later than Q1 2030, that is, no later than six years after the acquisition is complete.
Vodafone has long struggled in the Spanish and Italian markets. CEO Margherita Della Valle set out her inaugural strategy for Vodafone in May 2023. She said she was prepared to look at all options to address the situation in these markets which do not recover the cost of invested capital.
This week Vodafone definitively rebuffed advances from the Iliad Group in Italy, but indicated it is still in talks with others.
The Spanish market is in a period of flux, with Orange in the throes of acquiring MASMOVIL. The European Commission is insisting on remedies to protect competition and consumers in the market before granting approval.