Sufficient investment and job maintenance commitments. This has been the toll that the Spanish Government has demanded from Orange and MásMóvil to give the final authorization to the merger of the two companies that was approved yesterday by the Council of Ministers.
“The approval of this merger is accompanied by an industrial plan of the resulting entity that is truly ambitious and with a medium and long-term orientation, with a very important investment policy in the coming years in fixed digital infrastructures and mobile phones and their management, and important commitments to maintain employment”, assured yesterday the Minister for Digital Transformation, José Luis Escrivá, at the press conference after the Council of Ministers.
The Central Government considers the telecommunications sector to be strategic, as it is key to the maintenance of basic strategic infrastructures for the country’s competitiveness. For this reason, he has carefully studied the operation. “With this plan we ensure that Spain continues to be a European leader in connectivity” and that “it can maintain its attractiveness for investors in the sector”, acknowledged Escrivá.
The current CEOs of Orange, Ludovic Pech, and MásMóvil, Meinrad Spenger, celebrated with messages on the X network (formerly Twitter) the final authorization for a merger that has taken more than two years to achieve. “Great step for the telecommunications market in Spain!”, assured Pech in a message in which he also recalled that this merger “gives rise to the first operator in the country with more than 30 million mobile customers, seven million broadband customers broad and two million television customers”. Telefónica will no longer be the first operator in terms of number of customers, although not in terms of billing.
The merger agreement gives the new company a value of 18.6 billion euros, and also provides an estimated revenue of 7.4 billion euros and an operating result before taxes of more than 2.3 billion euros. The synergies derived from the merger will amount to more than 450 million euros per year from the fourth year after the closing of the transaction.
In addition, it establishes that the new company will be led by Meinrad Spenger, while Ludovic Pech will be its financial director and Jean-François Fallacher, current non-executive chairman of Orange in Spain and main negotiator of the merger, will be the president of the alliance of companies
In addition to the commitments imposed by the Spanish Government, the European Commission demanded from the two companies the transfer of part of their frequencies. These concessions were already negotiated in December with Digi, which must receive ownership of those frequencies within five to nine months.
For his part, Minister Escrivá made it clear that the criterion applied to approve the merger between Orange and MásMóvil is not specific. “This position does mark a new way of approaching the actions of the central government in a strategic sector such as telecommunications”, he answered questions from journalists. A clear reference that Zegona, the British company pending approval of the purchase of Vodafone España, in principle before the end of March, will also have to present an investment commitment.
