Vodafone gets final green light for Spanish sale

Source: Vodafone España

Spanish regulatory authorities have given final approval to Vodafone’s sale of its local operation to UK-based investors Zegona Communications.

Vodafone said the sale is now expected to complete at the end of this month, at which pint it will receive €4.1 billion in cash and 0.9 billion in the form of redeemable preference shares.

The company said the proceeds would enable it to begin a €500 million initial share buyback programme as part of a plan to return €2 billion to shareholders over a 12-month period.

The final regulatory green light follows approval of the sale by the markets regulator, the CNMC in February.

Zegona announced the deal to buy Vodafone Spain for €5 billion towards the end of last year. The acquisition will mark the UK investor’s second foray into the Spanish telecoms market, having previously invested in northern Spanish regional cable operator Telecable and – following a merger – regional operator Euskaltel, before agreeing the sale of the latter to alternative telco MásMóvil.

As part the Vodafone deal, Zegona will be able to use the Vodafone brand in Spain for up to 10 years post-completion of the acquisition. Vodafone and Zegona are entering into other transitional and long-term arrangements for services including access to procurement, IoT, mobile roaming and carrier services.

The CMNC approved the merger, noting the two companies’ operations don’t overlap in the region, with Zegona not having any current presence in the Spanish market.

Year of transition

Vodafone’s sale of Vodafone España to Zegona is one of three major M&A deals the company aims to complete this year, which the company’s management have characterised as a major year of transition.

In addition to the sale of the Spanish unit, Vodafone is planning to exit Italy through the merger of its unit there with Swisscom-owned Fastweb, and it also aiming for the merger of its UK mobile-focused operation with rival Three.