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Despite rumours of a potential tie-up being debunked last year, sources once again suggest that Masmovil is considering its options for a potential tie up
In the latter half of last year, Spanish media was told by anonymous sources that Masmovil and Vodafone were exploring the possibility of a merger in which no money would change hands. The joint ownership model, the sources said, had already been successful for Vodafone in other markets such as New Zealand and the Netherlands, and would lead to the creation of the second largest operator in Spain.
However, these rumours were consistently rebuked by Masmovil, whose CEO, Meinrad Spenger, called the rumours ‘more bluff than reality’ in October.
It seems, however, that these comments have done nothing to dampen speculation, with El Confidencial today reporting that Masmovil has ordered Goldman Sachs to conduct analysis on potential acquisitions, including of Vodafone.
Anonymous sources informed the newspaper that discussions between the two operators had intensified and that a merger could take place within a year. Meanwhile, separate sources spoke more specifically about the discussions, noting that Vodafone was seeking a majority stake of 60% in the merged company, while Masmovil was arguing for equal ownership.
Masmovil was acquired by a consortium of three private equity firms (Cinven, KKR and Providence Equity Partners) last year for $3.3 billion.
Any potential merger between Vodafone and Masmovil would likely fall under strict regulatory scrutiny, consolidating two of the four major players in the market. After a merger, the joint entity would have a similar market share to Telefonica’s Movistar, which currently dominates the Spanish market with a market share of around 30%.
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