Vodafone negotiates its merger with other operators in several European countries: Spain among them

Vodafone has confirmed, according to Techradar, that it is in negotiations in several European countries for a possible merger with other operatorsa step that has been used to ask the European and national regulatory entities to have a more open mind regarding transactions of this type.

The company would thus bet on advancing in the consolidation of the market, an ambition that the different operators have been thinking about achieving for some time, since according to them joining together would help them reduce costs and be able to finance investments in 5G infrastructure or in deploying fiber at a higher level.

However, some regulators do not look favorably on this type of merger, since they believe that the existence of greater competition will lower the bill for their clients. Therefore, it is likely that if European operators begin to announce mergers and purchases, regulators will put obstacles in the way of operations. It remains to be seen to what extent, and in the meantime Vodafone is already asking them to facilitate operations, as we have seen.

Until now, Vodafone has held meetings and negotiations last year on a merger with Orange, which would have created a European telecommunications giant. The operator has also been linked to movements on possible mergers with Iliad in Italy and Three in the UK, both much smaller than Vodafone. There have also been rumors about a possible negotiation in Spain with the MasMovil group in recent weeks.

The CEO of Vodafone, Nicke Read, after the publication of the company’s results, stated that he saw markets in which consolidation was very easy, without the need for punitive measures by regulators. For Read, “these markets are Spain, Italy, the United Kingdom and now Portugal. These four markets are the biggest opportunity, quite logically. We are involved with various players in various markets. We will continue to be open-minded and pragmatic in working with the opportunities that arise«.

This urgency for mergers in Vodafone may come, however, from the pressure of one of its investors, Cevin Capital, considered a «activist investor«, which apparently has bought a significant package of shares in the operator and would be pressing to push Vodafone towards consolidation.

Rumors of merger with MasMovil or Orange in Spain

Despite Read’s claims, for now the rumors of a merger with Orange or MasMovil are nothing more than that: rumors that have caused many rivers of ink to flow. For now there is nothing firmand Read has assured, about a possible merger with MasMovil, that they do not rule out any option.

Of course, he has indicated that Vodafone will be quite proactive in this regard, and that several situations could arise: creation of a joint venture with another operator, buying a majority stake in one or even another company keeping the majority of Vodafone Spain shares and that Vodafone becomes a minority partner in the operator in Spain. But also in the United Kingdom or in Italy.

Read, according to ABC, has recalled that for years they have had criteria to follow in the markets that are a priority for the operator related to their scale in each one, as well as the return of value in a few years. If they are not met, they would be open to another company that can provide more value managing the operator’s assets in the market in question. He has also recalled that they always evaluate their options thinking about what is best for Vodafone shareholders.

As for his possible merger with Orange, the operation seems much less likely, since the union of Vodafone and Orange would lead to a true telecommunications giant. In this case, it is likely that the regulators would make the merger more difficult, and the operation would therefore have more problems to go ahead. But we will have to wait to see if any of the negotiations that Vodafone is holding with European operators come to fruition and there is a merger operation or change of hands of shares.

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