The sale is expected to complete at the end of May 2024
Spanish authorities have granted the final approvals needed for the sale of Vodafone Spain to the British investment house Zegona Communications. The transaction is expected to complete at the end of May 2024.
At that point Vodafone will receive €4.1 billion in cash (subject to customary closing adjustments) and €0.9 billion in the form of Redeemable Preference Shares.
Consequently, Vodafone intends to commence an initial €500 million share buyback programme on 15 May 2024, as part of its plans to return €2 billion over 12 months.
According to Vodafone Group’s annual earnings report announced earlier today, the group’s net debt stands at €33.2 billion. The deal will not involve the transfer any debts associated with Vodafone Spain to the new owner.
The Spanish market
Zegona was established in 2015 with the objective of investing in businesses in the European Telecommunications, Media and Technology sector and improving their performance to deliver better shareholder returns. Zegona is led by former Virgin Media executives Eamonn O’Hare and Robert Samuelson.
Zegona Communications is in negotiations to acquire Avatel Telecom, which specialises in rural broadband and is the fifth largest fixed broadband provider in Spain.
The Spanish market is undergoing major upheavals, having proved fiercely competitive market. This spurred the €18.6 billion merger between Orange (the second largest operator in Spain behind Telefonica) and Másmóvil (the fourth largest) announced in summer 2022. It gained all the necessary approvals in Spain and from the European Union in March and renamed itself MasOrange.
MasOrange is now Spain’s largest converged operator, overtaking incumbent Telefonica.
Vodafone Group is also divesting itself of its Italian opco to Swisscom, via Swisscom’s Italian subsidiary Fastweb, for €8 billion. The two have a binding agreement, but are awaiting the necessary approvals to complete the transaction.