Orange and MasMovil win EU approval for Spanish tie-up (updated)

Digi Communications

20/02/2024 15:34

(Adds EU antitrust chief and companies comment, details)
    By Piotr Lipinski and Foo Yun Chee
       BRUSSELS, Feb 20 (Reuters) - French mobile operator
Orange  ORAN.PA  and Spain's MasMovil on Tuesday secured EU
antitrust clearance for a merger of their businesses in Spain
after agreeing to sell spectrum to strengthen a rival.
    The deal has been closely watched by the telecoms industry
for clues on whether regulators will ease their tough line on
mergers that reduce the number of mobile players from four to
three. Telefonica  TEF.MC  is the biggest telecoms provider in
Spain. 
    Orange said the deal, which has an enterprise value of about
18.6 billion euros ($20.1 billion), is now expected to be
completed by the end of the quarter.
    To get the deal between Spain's second and fourth-largest
telecoms providers over the line, MasMovil will divest spectrum
across three frequency spectrum bands to Romania's Digi
 DIGI.BX , the largest mobile virtual network operator in Spain,
so it can build its own mobile network. 
    Digi will also have an option for a national roaming
agreement, confirming an earlier Reuters report.
    "The commitments offered by the parties will enable Digi,
the largest and fastest-growing mobile virtual network operator
in Spain, to replicate the strong competitive pressure exerted
by MasMovil," EU antitrust chief Margrethe Vestager said in a
statement. 
    The EU competition enforcer had previously warned that the
deal to create the largest operator by customer numbers in Spain
may push up prices by more than 10% for consumers.
    Vestager said on Monday that she was not going to loosen
merger rules for telecoms deals, pitting her against EU industry
chief Thierry Breton who said a fragmented market was one of the
sector's biggest problems.
    Still the Orange and MasMovil deal shows that companies will
likely now have to offer valuable spectrum to boost rivals in
return for the EU green light for their deals.
    Chief executives of Orange and MasMovil cheered the EU
approval, saying their deal would create a single, stronger, and
more sustainable player in Spain with the scale to invest in 5G
and fibre.
    
($1 = 0.9246 euros)

 (Reporting by Piotr Lipinski; Editing by Kirsten Donovan and
David Evans)
 ((piotr.lipinski@thomsonreuters.com;))