Vodafone Spain Sale Seeming Increasingly Likely

Vodafone is reportedly seeking advice from various external advisors as to whether it should sell its operations in Spain, with the outcome expected to be released within a few months. 

Spanish newspaper Expansion quotes unnames sources as saying that Vodafone is working with multiple external advisors, including Garrigues and Morgan Stanley, to view strategic solutions for Vodafone Spain. 

These sources say that Vodafone will finalise the decision after the summer, most likely publically reporting on this in September. This will coincide with the European Commission’s investigation conclusion on the proposed merger between Orange Spain and MasMovil on September 4th, so it’s very likely the outcome will affect the decision made. 

While mentioning the Orange and MasMovil situation, Reuters have reported that the Commission intend to release a statement of objections in the coming days, warning that the deal could potentially be anti-competitive. This would most likely push telcos to offer solutions, but that’s something we’ll have to wait on. 

The Orange/MasMovil deal would absolutely affect Vodafone’s Spanish Operations. It currently sits at third in the four-operator mobile and fixed broadband sector but only barely behind Orange. If the merger was to go through, Vodafone would quickly drop to be the smallest player in both sectors. Hence, the impact either way of the merger has to be considered before making the decision to sell out. 

While the telecom industry is eager to hear the European Commission’s decision, Vodafone is being linked closer to investors than to any buyers. 

Expansion again report that the company have contacted multiple funds about acquiring the Spanish business, including Apollo Global Management and Apax Partners. 

Data from Berenberg places the value of Vodafone Spain at around €3.9 billion, a significantly lower amount than the €7.5 billion offer reported from merger talks with MasMovil in 2021. 

Vodafone Group, at the time, deemed the offer to be too low and rejected it. This was decided by CEO at the time, Nick Read.

The current dilemma of Vodafone is up to new Chief Executive Margherita Della Valle to decide, improving the company position and appeasing shareholders. The sale of Vodafone Spain could contribute to making this happen, depending on the price. Although the confirmation lands on factors that aren’t confirmed themselves yet, a sale seems increasingly likely.