British investment fund in the process of acquiring Vodafone Spain as Orange and Másmóvil merger waits for approval
El Economista reports [in Spanish] that the British investment fund, Zegona Communications, is in negotiations to acquire Avatel Telecom, a rural broadband provider in Spain. Zegona is already in the process of acquiring the business and assets of Vodafone Spain for €5 billion. It received approval from the European Commission (EC) earlier this year and is awaiting permission to proceed from Spain’s national competition authorities.
Vodafone Group is keen to exit the Spanish market as along with Italy, it is a drag on the group’s European financial performance. Vodafone Group’s CEO, says it cannot cover the cost of the capital employed in these markets.
Jockeying for position
According to the El Economista report, Avatel is the fifth largest broadband operator in Spain measured by the number of subscribers with about 400,000 customers. They would boost Vodafone Spain’s broadband base and overall competitive position. There are no details about financial terms of the potential takeover of Avatel.
Spain has proved a fiercely competitive market which spurred the €18.6 billion merger between Orange (Spain’s second largest operator in Spain behind Telefonica) and Másmóvil (the fourth largest) announced in summer 2022. They are still waiting for approval from the EC, which is expected with remedies attached to safeguard competition in the Spanish market.