Orange and MásMóvil have announced today that they are closing their 50/50 merger, after completing the last details that remained to seal an operation. As of today, they begin to operate as a single company although the official name that the merged company will adopt is unknown.
With the closing of the last administrative details and after having already received the approval of the European Commission and the Government for this operation, valued at around 18.6 billion euros, a new leader in the national telecommunications market emerges in Spain in number of customers, with around 37 million broadband and mobile customers.
"Orange and MásMóvil have today announced the creation of their new joint venture, thus completing the agreement to combine their operations in Spain. The shareholders of Orange and MásMóvil each own a 50% stake in the joint venture with the same governance rights in the combined entity," they said in a joint statement.
"The companies (Orange España and MásMóvil) will operate as a single entity. The accounts of both companies will be consolidated into a new legal entity already registered. As planned, the new company is operational as of today," they added. According to estimates, the new company is expected to generate synergies of around €490 million per year starting in the fourth year after closure.
In this way, the deadlines established by both companies have been met, which had indicated on several occasions that their intention was to resolve the closure of the operation in the first quarter of this year.
However, despite the merger having been sealed, the commercial name of the new company is still unknown, something that is expected to be revealed in April.
What is known is that the board of directors of the new company will have as CEO Meinrad Spenger, who was the CEO of MásMóvil since 2006, while the until now CEO of Orange in Spain, Ludovic Pech, will be the financial director of the joint venture.
Likewise, Jean François Fallacher, until now CEO of Orange in France, has been named non-executive president of the new company, while Alberto Castañeda will be the secretary of the board of directors and Germán López the director of Operations (COO, for its acronym). in English).
"Today's announcement is an important step in the development of Orange's long-term strategic plan in Europe. By creating a stronger and more sustainable operator, the joint venture launched today will help drive innovation and investment in broadband high-speed and digital services in Spain. This is clearly a positive step forward in our overall vision of a strong and prosperous telecommunications industry in Europe," said the CEO of the Orange group, Christel Heydeman.
Meanwhile, Spenger has highlighted that it is a "great honor and an enormous responsibility" to offer service to more than 30 million customers in Spain.
"We are going to strive to ensure that they continue to be the most satisfied customers in our country. With this 'joint venture' the Spanish telecommunications market now has a stronger company, with the capacity to innovate and invest and become a trusted partner for our individual and corporate clients," the manager said.
Regarding the 'headquarters' of the new company, sources familiar with the situation have told Europa Press that the operational headquarters will be located at the Orange facilities in the 'La Finca' business park, in Pozuelo de Alarcón (Madrid).
The decision to locate the operational headquarters in the Orange facilities is mainly due to the fact that MásMóvil's facilities in Alcobendas do not have the capacity to accommodate the volume of workers of the new company after the merger.
In that sense, Orange's workforce in Spain is around 6,600 employees, while MásMóvil has around 1,800 employees, although only workers from the offices in Madrid will move to Pozuelo de Alarcón.
On March 12, the Government authorized the merger of the companies and in the press conference after the Council of Ministers, the head of Digital Transformation, José Luis Escrivá, explained that the approval of the operation is accompanied by a "very ambitious" industrial plan. " and with a "very powerful" investment policy for the coming years in fixed and mobile digital infrastructures.
Although he did not go into too many details due to the confidentiality of the agreed industrial plan, Escrivá pointed out that it also contains commitments to "sufficient job maintenance."
In that sense, regarding the impact of the merger on employment, in mid-February Ludovic Pech limited himself to pointing out that the announced synergies "are based mainly on industrial synergies and not on employment issues."
On the other hand, the approval of the merger between Orange and MásMóvil by Brussels (announced on February 20) was subject to certain conditions ('remedies'), which were already agreed with Digi last December.
The Romanian operator closed a 120 million euro agreement with MásMóvil for the acquisition of a total of 60 megahertz (MHz) of radio space in different frequency bands.
As indicated by Digi in a statement, the company signed a spectrum transfer contract related to the transmission by Xfera Móviles (MásMóvil) of the spectrum licenses for two 10 MHz blocks in the 1,800 MHz band, another two MHz in the 2,100 MHz band and 20 MHz in the 3,500 MHz band.
Likewise, Digi closed another agreement with Orange by which the latter grants the Romanian operator the option to enter into a "national roaming service agreement" in the future for the provision by Orange to Digi of a wholesale service.
Following the approval of the operation by the European Commission and the Government, the joint activities of the two companies will be formalized in a 'joint venture' controlled 50% by Orange and MásMóvil "with the same governance rights in the combined entity ".
However, in the presentation of Orange's results in Spain that took place in mid-February, Pech stressed that the operator is considering taking a controlling stake after the merger with MásMóvil and acquiring an additional 1% of the joint venture. , until reaching 51%, a possibility that is included in the agreement signed between the parties in March 2022.
The manager recalled that this option of taking a control position would be executed between 24 and 42 months after the closing of the operation.
