The Government approves the purchase of Vodafone Spain by the Zegona fund
This Tuesday, the Council of Ministers authorized the purchase of Vodafone Spain, owned by the British group Vodafone, by the fund Zegona, as announced by the Minister for Digital Transformation and Public Service, José Luis Escrivá.
Escrivá, who has not given more details of the agreement, has referred to the operation that sold 100% of Vodafone Spain to the Zegona fund for 4.1 billion in cash and 900 million euros in form of Actions redeemable preferred securities, which will be amortized no later than six years after closing. An operation also valued at 5,000 million euros and which was announced at the end of last October.
Vodafone, which presented results this Tuesday, already announced what it expected an “imminent” authorization by the Government of Spain.
Previously, the operation had been authorized by the National Commission of Markets and Competition (CNMC), by the shareholders of Zegona and had also exceeded the procedure related to the regulations of the European Union (EU) on “foreign subsidies that distort the internal market”, so it only needed the approval of the Executive.
“A medium-term investment plan”
“As in previous operations of this nature, which have recently materialized, the authorized company has committed to a medium-term investment plan in the field of telecommunications, both in the fixed and mobile spheres, and, in addition, to maintain high financial solvency at all times,” Escrivá assured when asked about this authorization.
Thus, through a statement, the Ministry for Digital Transformation has reported that Zegona has presented various commitments in the authorization process through a strategic and financial plan. “Specifically, to guarantee the continuity of the service and contemplate future investments, mainly in mobile coverage with 5G technology, as well as to adopt measures that guarantee financial solvency,” added the portfolio led by Escrivá.
According to the Government, these investments – especially those aimed at the development of 5G – will allow Spain to consolidate its position “at the European forefront in connectivity”, although it has not specified their amount. Zegona has also committed to maintaining relevant contracts with the General State Administration and stability in the company’s strategic assets.
Possible layoffs
In this context, among the commitments acquired by Zegona and transmitted by the Government, those related to the maintenance of employment are not mentioned. Precisely, last week the unions CCOO and UGT conveyed their concern to the Government due to the possibility of layoffs at Vodafone due to the sale to Zegona.
“To the collective dismissal process already begun at Avatel, we are sure that others will join soon, especially if the rumors about Zegona are confirmed, in which clearly a progressive dismantling of the company is proposedwith the repercussions that it would have on an already very depleted workforce,” highlighted the federal secretary of the Communications and Culture sector of UGT, José Alfredo Mesa, in a letter addressed to the Secretary of State for Telecommunications and Digital Infrastructures, María González Veracruz.
For its part, CCOO also wrote a letter addressed to both Escrivá and the head of Labor and Social Economy, Yolanda Díaz, to express its “enormous concern” about the possibility of layoffs in the telecom company. “We will not accept, under any circumstances, that said operation could lead to the destruction of jobs due to the dramatic consequences that such a situation would have on workers and their families,” CCOO warned.
