Zegona closes €5 billion acquisition of Vodafone Spain

UK-based telecom investment company Zegona Communications has announced it has the completed the acquisition of telecom operator Vodafone Spain for €5 billion.

Source: Vodafone

Zegona said the transaction will provide attractive returns for investors and stabilise revenues with new commercial initiatives. The company announced its plans to buy the Spanish telco last year. The acquisition marks the Zegona second foray into the Spanish telecoms market.

The UK investor will be able to use the Vodafone Spain for up to 10 years post-completion of the acquisition. Vodafone and Zegona will enter into other transitional and long-term arrangements for services including access to procurement, IoT, mobile roaming and carrier services.

According to Vodafone, the enterprise value of €5.0 billion represents a multiple of 5.6x Adjusted EBITDAaL and 13.0x Operating Free Cash Flow for the 12-month period ended 30 September 2023.

Senior management restructure

Jobs across Vodafone Spain’s senior management department have been cut as part of the restructure, with the team down from 11 to seven.

Telecom veteran José Miguel García was appointed as chief executive officer of Vodafone Spain, effective from June 1 2024. He was previously CEO of Zegona invested telecom operator Euskaltel, before it was sold to MasMovil for €3.5 billion. He was also the CEO of telecom company Jazztel from 2006 to 2015. During his leadership, he oversaw the sale of Jazztel to Orange for €3.4 billion, resulting in €2.8 billion of value for the company.

The restructured senior management team also sees Ángel Álvarez, former chief commercial officer of Digi Spain, named the new director of the consumer business unit at Vodafone Spain.

Julia Velasco, network director at Vodafone Spain, will have an expanded role of managing the company’s IT systems and customer operations

Eloy Rodrigo Gil will remain as finance director and Jesús Suso will remain as director of the enterprise business unit at the telco.

Spanish markets regulator, the National Commission for Markets and Competition approved the sale in February, noting the two companies’ operations don’t overlap in the region.

Following the sale, Vodafone Group will provide certain services to Vodafone Spain after completion of the transaction and Vodafone will continue to have a presence in Spain through its Innovation Hub in Málaga.

Eamonn O’Hare, Zegona’s Chairman and CEO, said: “We have now completed the acquisition of Vodafone Spain and look forward to transforming the business and returning it to growth. I am pleased to welcome José Miguel García to lead Vodafone Spain as CEO, reuniting a team that has a proven track record of highly successful operational transformations in Spanish telecoms.

“The new 10-year network access agreement signed with Finetwork earlier this week demonstrates our ability to move swiftly on our well-defined strategy. With our proven track record, we are confident we will improve the performance of Vodafone Spain whilst delivering significant value for shareholders,” O’Hare added.