Euskaltel’s board has recommended to shareholders that they accept the €1.99 billion takeover bid from Spain’s fourth-largest operator

The Basque Country-based operator Euskaltel has had quite the journey in the past couple of years. 

In February 2020, the company signed a trademark licensing agreement to use the Virgin brand, hoping that the use of this trusted name would help them rapidly expand their operations throughout Spain.

At the time, the company was the fifth-largest operator in Spain, with around 800,000 customers, though these were broadly localised to the Basque region itself.

The company’s National Expansion strategy began in earnest in May that year, with Euskaltel targeting 85% of the Spanish market in five years and entering 18 million homes. By 2025, the company estimated that 40% of its revenue would come from the Virgin telco business.

The expansion programme had seemingly been going well when, in March 2021, fourth-place Spanish telco Masmovil announced that it had approached Euskaltel with a €2 billion takeover offer

At the time, Masmovil was, not for the first time, embroiled in rumours surrounding a potential merger with Vodafone Spain, though these appear to have subsided, at least for now.

Spain’s competition watchdog gave approval for the merger last month and now the board of Euskaltel is reportedly recommending the merger to shareholders as being financially fair. 

Spain’s telecoms market is viewed by many as being too fragmented and in need of consolidation. Bloomberg’s Intelligence’s Europe Telecommunications 2021 Outlook, for instance, found Spain and Sweden to be the markets most likely to see consolidation in 2021. The opinion seems to be reflected by the major operators themselves, with the CEO’s of both Vodafone Group and Orange Spain suggesting at the start of the year that consolidation would be beneficial for the Spanish market.


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