New chapter of merger mystery
Vodafone Group’s Spanish telco division is attracting takeover interest from potential buyers, including Apollo Global Management, reports Bloomberg’s sources close to the sales process. Vodafone is not running a formal sale process for the unit, but The UK telco group would consider offers at the right price, it said. Vodafone’s Spanish unit could sell for over $4 billion, said its sources, but deliberations are ongoing and there’s no certainty they’ll result in a sale of the Spanish operation. Both Apollo Global Management and Vodafone declined to comment.
Vodafone’s business in Spain has shrunk in the face of competition from incumbent carrier Telefónica, France’s Orange and private equity-backed MásMóvil Ibercom. From 2018 to 2022, its revenue generated in the country fell 16% to about €4.2 billion ($4.6 billion).
Nick Read, Vodafone’s former chief executive officer, had sought a merger in Spain in 20212, and again last year, only to miss out when Orange Spain and Masmovil agreed to combine there at the end of 2022. Interim Vodafone CEO Margherita Della Valle (pictured) has since relegated Spain from one of Vodafone’s main markets, folding it into a group of smaller units such as Ireland and Greece. Colman Deegan departed as Vodafone’s CEO in Spain in March.
Newbury-based Vodafone has been under pressure to simplify its business and pursue deals to unlock value for investors and revive a flagging share price that’s fallen almost 60% over the last five years. The stock closed up 2.3% in London on Wednesday, giving the company a market value of £24.1 billion (€27.53 billion).
Vodafone has been largely frustrated in these efforts. While it’s managed to sell smaller units in countries like Hungary and a stake in its mast unit, Vantage Towers, it’s struggled with transactions in larger markets.
In addition to missing out on the Spain deal, Vodafone last year rebuffed an offer from French telecoms billionaire Xavier Niel for its Italian unit. Months-long talks about a British merger with Three UK, meanwhile, have yet to close. Strategic investors and some-time rivals Niel, Emirates Telecommunications Group Company PJSC and Liberty Global Plc have bought up more than a fifth of Vodafone in the last year, raising questions about how they might influence strategy at the British group going forward.