Orange said Spanish market authorities have given it the green light to make an offer for 100 per cent of the shares in Jazztel, meaning that the way is now clear for the France-based company to pursue its proposed €3.4 billion ($3.7 billion) acquisition of the fixed broadband provider.
The Spanish Securities Commission, or CNMV, noted that the effectiveness of the voluntary offer is conditional upon the acceptance by shareholders representing at least 51.23 per cent of the current capital of Jazztel. Orange is to offer €13 per share to existing shareholders from May 28 to June 24, and will pay €3.4 billion if it secures 100 per cent of the shares.
Orange last week won approval from the European Commission (EC) for the proposed deal after agreeing to certain conditions. For example, the company will sell a fibre network in Spain representing 720,000 homes.
Through the Jazztel acquisition, Orange said it aims to create the second-largest fixed-line broadband operator and "one of the most dynamic players in the mobile segment in Spain", in an effort to drive customer take-up of convergent offers. The transaction is also expected to generate cost savings of around €1.3 billion for the future combined entity, in particular thanks to savings in operational expenditure and investments in networks.
Orange Spain already sells converged bundles of fixed and mobile services under Orange Kangaroo, and in future will hope to improve its standing in a market with a strong heritage in multi-play strategies. Telefónica Movistar led the charge here with the quad-play Fusion plans that combine mobile services with fixed voice, broadband and TV, along with value-added services such as data sharing and free access to content.
Yoigo also sells multi-service plans under the Fusion brand as part of an agreement with Movistar, and Vodafone Spain recently launched a converged offer under Vodafone One.
For more:
- see this Orange release
- see this CNMV release (in Spanish)
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