UK investment firm Zegona ‘in discussions’ to buy Vodafone’s Spanish division
British investment company Zegona ‘in talks’ to acquire Vodafone’s Spanish division
- According to Expansión, the deal could be worth more than £4.34 billion
British investment company Zegona Communications is in talks with Vodafone about a possible takeover of the telecom giant’s Spanish activities.
Madrid-based newspaper Expansión reported on Friday that the telecom investment company was seeking financing for a bid to buy Vodafone’s Spanish unit.
The report found that the offer could value the unit at more than €5 billion (£4.34 billion) and that Zegona could buy a 50 percent stake.
Zegona later confirmed that it is “in discussions with Vodafone Group in connection with the potential acquisition, and with banks in connection with its financing.”
Zegona Communications announced that it was in discussions with Vodafone about a possible takeover of the telecom giant’s Spanish activities
Vodafone is one of the three largest telecom operators in Spain, together with Telefónica and the local division of the French Orange.
Zegona warned that any deal is subject to agreement on final terms, due diligence and formalization of financing arrangements.
“Therefore, there is no assurance that the potential acquisition will proceed, nor what the final terms of such potential acquisition will be,” the report said.
The group’s turnover increased last quarter due to price increases, although this came at the cost of losing some price-conscious customers.
Vodafone’s total revenue fell 4.8 percent to €10.7 billion (£9.3 billion) in the three months to the end of June, although like-for-like sales rose 3.7 percent.
Strong performance in Britain, where the company is merging with rival mobile network Three, helped offset declines in Germany, its biggest market, as well as Italy and Spain.
In June, Vodafone and Three struck a long-awaited £15 billion merger deal to create Britain’s largest mobile network.
With a total of 27 million customers, the new joint venture will surpass EE and Virgin Media O2 to claim the top spot.
New Vodafone boss Margherita Della Valle described the deal as ‘a game-changer in our home market’.
But the announcement sparked fears of higher prices for consumers.
The deal will be examined by the Competition and Markets Authority (CMA) in a process that analysts say could take 18 months, and will also require approval on national security grounds.
Vodafone shares are up 0.69 percent to 81.62p in morning trading on Friday.
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