The European Commission has given its authorization to Zegona to acquire 100% of Vodafone Spain
The British investment fund Zegona announced the purchase of Vodafone Spain last October 31. The operation would cost 5,000 million euros, but it could not be carried out until certain organizations gave their approval. One of them was the European Commission (EC)which had to analyze whether foreign investment could destabilize the Spanish telecommunications market. He thinks no, so he says ‘OK’.
Needs more authorizations but the purchase seems on track
The European Commission’s Directorate General for Competition has approved the purchase. It had to initiate an investigation into the operation, but only in case it considered that it could cause problems in the Spanish market. He does not think that way, and, therefore, he indicates that there are “insufficient indications to begin an in-depth investigation”.
Zegona sent a request to said body on December 15, 2023 for them to approve the acquisition. According to El EconomistaZegona Communications received the letter giving the green light to the transfer last Tuesday, January 30. The purchase of Vodafone Spain by Zegona does not violate article 10, section 4 of the Regulations of the European Parliamentrelated to foreign subsidies that were capable of altering the internal market.
Anyway, Zegona needs other authorizations. The British investment fund wants to obtain control of the Spanish operator during the first months of 2024, something that seemed difficult; However, the speed of obtaining EC permission opens the door for it to be possible. To take control, Zegona must obtain authorization from the National Markets and Competition Commission (CNMC) and that of Spanish government.
The CNMC monitors that power is not concentrated in the telecommunications market and assesses the possible risks towards clients or companies in the sector. Everything indicates that they will not object to the operation. On the other hand, the Spanish Government must approve the operation, since the telecommunications sector is considered strategic, something that became clear with his intervention in Telefónica. Any foreign purchase of more than 10% of an operator needs to have its approval.
We previously commented that the operation is valued at 5 billion euros. It would mean the acquisition of 100% of the Vodafone Group, that is, Vodafone Spain. Of the 5,000, 4,100 would be paid in cash; while the remaining 900 in preferred shareswhose reimbursement could be delayed up to six years after purchase, in 2023.
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