According to Spanish news source El Confidencial, MasMovil has reportedly approached Vodafone with a takeover offer for its local unit
The Spanish telecoms market is one of the most competitive in the world, with five major mobile players and a myriad of fixed broadband players. Profit margins are slim, with many analysts suggesting that industry consolidation is quickly becoming inevitable.
Now, according to reports by Spanish media, such consolidation could finally be underway, with MasMovil approaching Vodafone with an offer to acquire the company’s Spanish unit.
The sources described the talks as at an “intermediary phase”, suggesting that discussions were currently ongoing regarding the company’s valuation. As El Confidencial points out, Vodafone Spain was reportedly worth €7 billion in 2019.
The news comes at a time when mergers are a notable focal point for Vodafone. Group CEO Nick Read said when reporting the company’s most recent results that Europe was primed for telecoms consolidation.
“Of course we want competition. But at the same time, we need to encourage investment in next generation infrastructure to remain globally competitive,” he said in a company press release.
Late last month, Vodafone was linked to merger talks with Three in the UK – though these seem to have dissipated – as well as with Iliad in Italy.
In Spain itself, discussions of a merger between MasMovil and Vodafone have been on and off for years. Back in 2020, anonymous sources were suggesting that the two operators were exploring a merger of equals, a model that Vodafone had already found success with in markets like New Zealand and the Netherlands.
At the time, however, MasMovil was quick to debunk these rumours, with company CEO, Meinrad Spenger, notably calling them “more bluff than reality”.
Nonetheless, the rumours persisted at the start of 2021, with sources suggesting that Vodafone had insisted upon taking a 60% share of any merged company, something that MasMovil would not abide.
The rest of 2021 passed by with little in the way of further developments, though today’s revelation suggests that discussions have indeed continued behind closed doors.
If Vodafone and MasMovil’s Spanish operations were to merge, the joint company would have a market share approaching 30%, slightly smaller than that of current market leader Telefonica.
The extent to which the Spanish operators are beginning to strain has becoming more apparent in recent months, with many of them taking measures to streamline their businesses by cutting back their workforces; Telefonica, for example, said late last year that it was aiming to cut between 2,000 and 4,000 jobs, with rivals Orange and Vodafone pledging to do likewise, although on a smaller scale.
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