Almost two years is what it took for Orange and MásMóvil to receive authorization to merge their businesses as they announced on March 8, 2020. According to the statement issued this Tuesday by the General Directorate of Competition of the European Union, the merger It is approved with the assignments that both companies had agreed with the telecommunications operator Digi.
The new company will become the first operator in the country by number of clients, although it will be the second in billing volume. The combined assets of Orange and MásMóvil will serve more than 7.3 million broadband customers, more than 30 million mobile services and more than 2.2 million television customers, according to information provided by both companies.
On the wholesale side, you will manage significant network and IT assets to ensure national coverage in both FTTH and 4G/5G.
In financial terms, the combined entity estimates estimated revenues of more than €7.4 billion and an operating result of more than €2.3 billion. The enterprise value will be 18.6 billion euros and will generate synergies of more than 450 million euros per year (starting in the fourth year after the closing of the operation).
Digi consolidates itself as the fourth operator, it will not have enough strength to devastate the market as MásMóvil did at the time after receiving the remedies from the merger between Orange and Amena.
Specifically, Europe has authorized the merger after Orange and Más Movil presented an agreement for the transfer of assets (remedies, according to the sector's jargon) with Digi last November. The parties have agreed to transfer to Digi, 60MHz of spectrum (pending approval by the Spanish Government) and an optional national roaming agreement.
Specifically, the agreement presented to Brussels contemplated that these 60MHz would be divided into three bands. For the 1,800MHz, another 20 in the 2,100MHz band and the remaining 20 in the 3,500MHz band. For them, the Romanian company will pay 120 million euros. Digi will also have preferential access to the mobile network.
The operation must now go through the national authorization process, which is not expected to be completed, at least until the end of the first quarter, so until then both companies will continue to operate independently as before.
"Good things take a long time to come! We are delighted to assume a relevant role in the telecommunications sector in Spain. Our exceptional team is committed to creating a unified and differential company, capable of generating positive impact and offering a trustworthy service to continue to have the most satisfied customers in Spain," says the CEO of MásMóvil. Meinrad Spenger.
For her part, Christel Heydemann, CEO of Orange, stated: "Today's announcement marks a decisive moment for the Group in Europe. Our Joint Venture proposal with MásMóvil will create a unique, stronger and more sustainable player in Spain. By joining forces , we can have greater scale, we can innovate and we can drive investment in the networks of the future for the benefit of consumers and businesses.
If the agreed conditions are met, Meinrad Spenger will assume leadership of the new company, although Orange will have control. As confirmed last week by the CEO of Orange in Spain, Ludovic Pech, the French company is going to exercise the right contemplated in the merger agreement and will buy 1% of the capital to take control of the new company.
