Orange announces an agreement to buy 50% of MasOrange for 4,250 million

The French telecom Orange has announced a non-binding agreement with Lorca, the investment vehicle created by the KKR, Cinven and Providence funds, to acquire its 50% in MasOrange for 4,250 million euros, the teleco fruit of the merger between MásMóvil and Orange in Spain. Thus, it will acquire 100% of the operator, the leader in Spain by customer volume, as reported by the French company in a statement.

“This operation will accelerate Orange’s strategic plan and will further strengthen Orange’s position in Spainthe group’s second market in Europe,” the French company has highlighted. “With full ownership (of MasOrange), Orange confirms its long-term industrial commitment in Spain and its trust in MasOrange and its management to create value for all interested parties,” the company added.

In this context, it is expected that The signing of a binding agreement will occur at the end of this year.although the signature is conditional on the approval of the definitive terms and conditions. “The transaction will be presented to the workers’ representative bodies. Subsequently, it must be approved by the relevant regulatory authorities. The operation is expected to be completed in the first half of 2026,” added Orange.

The announcement of the non-binding agreement occurs the day after the company and the unions UGT, CCOO and Fetico have closed the first collective agreement of the merged company. Likewise, the announcement comes a week after the financial director of the Orange group, Laurent Martinez, assured that the company can assume the purchase of 50% of MasOrange and its corresponding part of the operation to acquire most of Altice’s assets in France together with Bouygues and Iliad without affecting the dividend.

In this sense, the joint operation of Altice is valued at around 17 billion euros and the part corresponding to the assets in which Orange is interested would be around 5,000 million euros.

IPO

The closing of the merger between MásMóvil and Orange in Spain, an operation valued at around 18.6 billion eurosoccurred at the end of March 2024 and the agreement included a series of conditions around the possibility of Orange taking control of the new company between 24 and 42 months after the conclusion of the transaction.

Another clause indicated that the company’s IPO would be blocked for two years after the closing of the operation, that is, until April 2026, as the CEO of Orange, Chrystel Heydemann, recalled last week. Likewise, the board also pointed out at the end of last July that there is a “very clear process” aimed at going public by MasOrange.

Customer volume

The merger of MásMóvil and Orange meant, in addition to the creation of the main telecommunications company in Spain by customer volume, with 37 million between broadband and mobile, the reinforcement of Digi, which is already the fourth operator in the country. On this last point, the approval of the merger by Brussels was subject to certain conditions (‘remedies’) that benefited Digi.

Specifically, the Romanian operator closed an agreement of 120 million euros with MásMóvil for the acquisition of a total of 60 megahertz (MHz) of radio space in different frequency bands. In addition, Digi closed another agreement with Orange by which the latter granted the Romanian operator the option to celebrate a future agreement. “national roaming service agreement” for the provision by Orange to Digi of a wholesale service.

On the other hand, it should be noted that shortly after the closing of the merger of Orange and MásMóvil there was a employment regulation file which resulted in the departure of 609 workers (473 voluntary departures and 136 forced dismissals).

‘Fiberco’ with Vodafone

Another of MasOrange’s great movements has to do with the creation of a fiber optic company together with Vodafone Spain -controlled by the British investment firm Zegona- and backed by the Singapore sovereign wealth fund (GIC).

The closing of the operation for the creation of this new ‘fiberco’ is expected to materialize in the fourth quarter of the year and the CEO of the company will be Blanca Ceña, as was already announced at the end of September. Regarding the capital structure of the ‘fiberco’, MasOrange has a 58% shareVodafone Spain with 17% and GIC with 25%.

MasOrange and Vodafone Spain will contribute to ‘PremiumFiber’ -the name of this new company and which was announced on October 13- a network with coverage of around 12 million real estate units and close to 5 million clients.