ORANGE Spain and MASMOVIL agreed to combine their operations in the form of a 50-50 joint venture co-controlled by both companies with equal governance rights.
The deal includes a right to trigger an IPO under certain conditions for both parties after a defined period and, in such a scenario, an option for ORANGE to take control of the combined entity at IPO price.
The companies said the merger will lead to significant efficiency gains, allowing the combined company to accelerate investments in FTTH and 5G that will benefit Spanish customers.
As part of the final agreement, ORANGE Spain’s enterprise value is set at €7.8 billion (7.2x 2022E EBITDAaL and 37.1x 2022E EBITDAaL – eCapex) and MASMOVIL’s (which includes the acquisition of EUSKALTEL) at €10.9 billion (8.7x 2022E EBITDAaL and 14.9x 2022E EBITDAaL – eCapex).
Christel Heydemann, CEO of ORANGE, commented: “I am very happy to announce the conclusion of these negotiations today. This deal paves the way for the creation of a joint company that combines the forces of ORANGE and MASMOVIL into a single, stronger operator that will enable investments in 5G and Fiber, benefiting customers across Spain. I strongly believe that the creation of this new company is of fundamental importance for the Group, the Spanish telecoms market and for our customers.”
Meinrad Spenger, CEO of MASMOVIL, commented: “This is a great day for Spanish consumers as well as for our stakeholders. Together with ORANGE, we plan to form a strong operator with a sustainable business model and the capacity to invest in world-class infrastructure, technology and talent. We anticipate this will drive competition, digitization and innovation in the Spanish market.”
