The Romanian operator Digi has reached a preliminary, non-binding agreement to acquire surplus assets from the merger between Orange and MásMóvil in Spain, as published this Wednesday by the agency Bloomblerg and which the interested parties have declined to comment.
This commitment, which does not represent an obligation for Digi, can be the final push that the European authorities need to give the final approval to the merger operation that was announced in September 2022.
With it in hand, Orange and MásMóvil would be in a position to meet the requirement requested by the Competition authorities when last July they suspended the merger process sine die until both companies identified the assets they would be willing to get rid of. to facilitate the operation, what is known in the sector as 'remedies'.
Until that moment, both Orange, MásMóvil and even Telefónica had defended that the merger be authorized without the need to sell any assets, but the Competition authorities have refused to do so.
The union of Orange and MásMóvil represents the creation of a telecommunications giant in Spain, a company valued at 18,000 million euros, which would be even larger than Telefónica and which, without changes, would mean going from four large operators in the sector to three, a cut in competition that Europe does not accept.
Digi, which is currently the fifth operator in the market, has been identified from the outset as the company best positioned to access these assets both by sector experts and by the company itself. Marius Varzaru, CEO of Digi, valued the investment that he was willing to make to keep part of the assets derived from the merger at around 2,000 million.
But it is not the only offer that Brussels has on the table, which is why the signing of this pre-agreement places it in a preferential position to obtain a part of the possible remedies, while other companies are offering Brussels to obtain the total of the assets, especially if they are mobile networks.
Currently, Digi provides mobile service through the Movistar network and landlines, in addition to agreements with third parties, they are in the process of extending their own network. Acquiring mobile spectrum derived from the merger would grant it autonomy in that market area, but at a very high financial cost.
If it is part of the fixed network, it could serve to cut the ambitious fiber plan that it is deploying and gain the infrastructure it is looking for to reach homes directly.
In any case, the response will not be immediate. Orange's management is betting, as commented in the last presentation of results, on Brussels making the final decision before the end of the year so that the merger can be completed during the first quarter of 2024.
