According to reports, the deal could be worth over $4 billion
Vodafone has long lamented the highly competitive nature of the Spanish telecoms market, in which they compete fiercely with Movistar, Orange, and MasMovil in an ongoing price war.
For some time, the company had hoped that market consolidation would be the solution to their woes, with rumours of a potential merger with MasMovil rising and falling repeatedly in recent years.
Indeed, this focus on consolidation in competitive markets quickly became something of a bugbear for the multinational mobile operator. Championed by then CEO Nick Read, Vodafone explored numerous tie-ups in markets including Italy, Belgium, and the UK.
But while discussions with Three UK appear to now be bearing fruit, a dearth of other merger deals meant that this news came too late for Read, who resigned at the end of last year.
In Spain specifically, Vodafone’s dreams of consolidation were ultimately quashed when MasMovil instead signed a deal to merge with rival telco giant Orange last year.
As a result, it now appears that Vodafone may be looking to exit the Spanish market entirely, with sources speaking to Bloomberg suggesting that the company has been presented with takeover offers from various suitors, including Apollo Global Management Inc.
The details of such offers have yet to be revealed, though the sources suggest that Vodafone Spain could be valued at over $4 billion.
Vodafone has not announced any formal intention to sell its Spanish unit, but the sources suggest that the operator will consider offers if the price is right.
The fact that Vodafone Spain is receiving unsolicited takeover offers should not come as too great a surprise given the unit’s perceived vulnerability.
Since the departure of Nick Read, interim CEO Margherita Della Valle has moved to reduce Vodafone Spain’s independence by aggregating it with the company’s wider European Cluster, a group that contains numerous smaller European units like Ireland and Greece. Della Valle says that this move will help to further simplify the Group’s management and revitalise business growth in Spain, with the Cluster under the direct leadership of CEO Serpil Timuray.
As a result of this strategic rebalance, Vodafone Spain’s CEO, Colman Deegan, resigned from his post at the start of this year.
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