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The combined entity includes more than 37 million mobile and broadband lines
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Meinrad Spenger, the CEO of Masmovil, has been appointed CEO of the new JV
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Orange Spain CEO Ludovic Pech will serve as chief financial officer
It’s official: Orange Group and Masmovil have just completed the merger of their respective operations in Spain, forming a 50:50 joint venture that has become the market’s largest operator in terms of customers, with over 37 million mobile and broadband lines.
In a statement released on Tuesday, the two groups indicated that the joint venture will be operational with immediate effect, completing a transaction that was first announced in July 2022. The aim at the time was to create a JV with a combined enterprise value of €18.6 billion ($20 billion).
As things stand, the brand of the new combined entity has not yet been confirmed, although Spanish media has reported that it will be named MasOrange.
What we do know is that Meinrad Spenger, the CEO of Masmovil, has been appointed CEO of the new JV, while Orange Spain CEO Ludovic Pech is chief financial officer. Germán López, general manager at Masmovil, is the JV’s chief operating officer.
In addition, Jean François Fallacher, CEO of Orange France, has been appointed non-executive chairman of the new combination. He served as CEO of Orange Spain between September 2020 and April 2023.
The new entity is expected to generate synergies of more than €490 million per year by the fourth year after closing. Based on preliminary closing accounts, the respective proceeds at closing will be approximately €4.4 billion for Orange and about €1.65 billion for Masmovil shareholders.
Orange Group CEO Christel Heydemann recently insisted that the Orange-Masmovil merger will not adversely affect competition in Spain because the two operators will be in a better position to compete with current market leader Telefónica and Vodafone Spain.
Speaking during a keynote at MWC Barcelona 2024, she said the JV will create “more scale and ability to invest in the network.”
Currently, Orange is “lagging behind Telefonica in terms of 5G rollout and … because we’re going to merge with Masmovil, we’re going to be able to continue to invest in fiber … 5G … [and] customers in Spain, and to compete based on scalable infrastructures,” Heydemann said.
Long time coming
The completion of the transaction brings to an end a merger process that took months to achieve regulatory approval by the European Commission following a protracted in-depth investigation. Indeed the closing of the transaction was announced only days before its latest targeted date of March 31, 2024.
The commission’s eventual decision to green light the deal in February was primarily owing to a package of measures or remedies that Orange-Masmovil agreed in December with Digi Communications. Spain’s government also gave its blessing to the deal around two weeks ago.
The Romania-based group currently operates a mobile virtual network operator (MVNO) called Digi Spain, which is also building its own fiber network.
As part of the merger remedies, Orange and Masmovil committed to sell 60 GHz of spectrum held by Masmovil to Digi across three frequency spectrum bands (1,800 MHz, 2,100 MHz and 3.5 GHz), to allow Digi Spain to build its own mobile network.
In addition, Digi has the option to enter into a national roaming agreement with the JV in the future, although it could choose to remain with its current wholesale partner, which is Telefónica, or pick another operator, such as Vodafone Spain.
Telefónica has already said it will do all in its power to retain Digi as a wholesale partner and bag any future roaming or network sharing deals.
As for Vodafone Spain, it is in the process of being sold to Zegona Communications. The country’s regulator Comisión Nacional de los Mercados y la Competencia (CNMC) recently approved the acquisition, noting that it “does not give rise to horizontal or vertical overlaps, so it will not introduce significant changes in the market structure.”