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Orange and MásMóvil reveal merger plans
Wednesday, July 27, 2022 @ 3:06 PM

TELECOMMS and internet operators Orange and MásMóvil have announced a planned merger worth €18.6 billion, set to go ahead in the second half of 2023 at the latest.

Still subject to competition authority approval, the fusion will be a joint venture rather than a buyout or takeover – each company will participate 50-50 in management, and it is expected both brand names will continue.

Orange's head office on the La Finca industrial estate in the wealthy Madrid-region commuter town of Pozuelo de Alarcón

French phone giant Orange, which trades as EE in the UK and as Orange elsewhere in western Europe, will hold €7.8bn in capital, and MásMóvil – run by the British holding company Lorca JVCo – will own €10.9bn.

In a joint press release, the two corporations forecast that as a combination, they will see around €7.3bn in annual turnover and €2.2bn in net profits.

The companies say they will be able to benefit from economies of scale and in combining strategies, allowing them to speed up investment in FTTH and the 5G roll-out, 'which will benefit consumers in Spain'.

Their joint deal includes the right to launch a public share offer under 'certain conditions agreed upon by both parties' and 'after a set period of time'.

In this hypothetical scenario, Orange would have the option to buy out all or the majority of its trading partner's shares at their standard price, enabling it to take control of MásMóvil.

The due diligences under way since March this year have revealed a joint potential for growth of around €450 million per year after the fourth year of working together, and the transaction would be funded via a credit of €6.6bn.



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