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Rumour resurfaces of MásMóvil -Vodafone España merger


A Spanish newspaper reports that talks have intensified in recent weeks but no agreement has been reached.

El Confidencial again reports that MásMóvil is looking at purchase options in Spain and Portugal, and that Vodafone’s operations are its primary interest, according to unnamed “financial sources”.

The rumours of some kind of tie-up between the two emerged last September. In October, Vodafone and MásMóvil denied that the Spanish mobile operator was working with Goldman Sachs to buy the UK operator’s business in Spain for €6 billion, but the rumours persisted.

Right percentage

The new report says that Vodafone España allegedly wants to own 60% of combined entity, but MásMóvil is pushing for a 50:50 joint venture. The article also states that Vodafone España’s value has increased as its commercial performance has stabilised and margins improved over the last year.

MásMóvil was taken into private ownership in November 2020 after eight years in operation. Now 99.32% is owned by KKR, Cinven and Providence funds.

In a research note published by Jefferies in September 2020, the equity research house suggested that “levering JV to 5x could allow [Vodafone] to release €5bn and reduce headline leverage by 0.2x. JV would avoid necessity of establishing a control premium”.

Even is agreement between the two could be reached to make it into Spain's second largest mobile operator after the incumbent Telefonica, it remains to be seen if the competition authorities, including the European Commission would approve the deal. Having said that, the Commission has been reprimanded over previous decisions that prevented consolidation by the European Court and there are suggestions this could change its approach.