Communiqué Orange - ORANGE and MASMOVIL enter into exclusive
discussions to combine their operations in Spain
Press release8 mars 2022
ORANGE and MASMOVIL enter into exclusive discussions to
combine their operations in Spain
ORANGE and MASMOVIL (LORCA JVCO) announced today that they have
entered into exclusive discussions to combine their businesses in
Spain1.
The combination would take the form of a 50-50 Joint Venture,
co-controlled by ORANGE and MASMOVIL (LORCA JVCO) with a combined
enterprise valuation of €19.6Bn. Valuations are attractive for both
businesses, with ORANGE Spain’s enterprise value at €8.1 billion
(7.5x 2022E EBITDAaL and 38.7x 2022E EBITDAaL – eCapex)2 and
MASMOVIL’s (which includes the acquisition of EUSKALTEL) enterprise
value at €11.5 billion (9.9x 2022E EBITDAaL and 17.8x 2022E
EBITDAaL – eCapex)2.
ORANGE and LORCA JVCO would benefit from equal governance rights
in the combined entity. Accordingly, neither ORANGE nor LORCA JVCO
will consolidate the combined operations.
The agreement between the parties includes (i) a right to
trigger an IPO under certain conditions for both parties and (ii) a
path-to-control right for ORANGE to consolidate the combined entity
in the case of an IPO. ORANGE would neither be forced to exit nor
to exercise these options.
The Joint Venture would bring together the assets, capabilities
and teams of the two companies in Spain, building on highly
complementary business models as well as an existing successful
collaboration, to serve 4.0+3.13 million fixed customers (of which
3.0+2.6 convergent), 11.5+8.7 contract mobile customers and close
to 1.5 million TV customers.
The Joint Venture would own network assets that provide it with
a competitive edge in the market including:
- A state-of-the-art, nationwide FTTH network reaching over 16m
homes;
- A leading-edge mobile network with full national coverage,
serving large volumes of traffic in the Spanish market.
The combined entity would become a stronger market player with
revenues of over €7.5 billion, EBITDAaL over €2.2 billion and would
gain the necessary scale and efficiency to:
- undertake an ambitious and sustainable expansion of its FTTH
and 5G networks and
- contribute to Spain maintaining and further developing a
competitive telecom infrastructure.
With a comprehensive and complementary portfolio of brands, the
Joint Venture would provide Spanish consumers and businesses with
competitive and differentiated value propositions to serve the
needs of all market segments, with high quality connectivity, an
excellent customer experience and a comprehensive portfolio of
innovative services in the challenging digital landscape.
This Joint Venture is expected to generate relevant synergies
which should reach an annual run rate in excess of €450m from the
third year post closing onwards.
The transaction is expected to be signed by the second quarter
of 2022 and should close by Q2 2023, subject notably to approval
from the relevant administrative, competition and regulatory
authorities.
Stéphane Richard, Chairman & CEO of ORANGE, commented: “I
look forward to creating this joint-venture with MASMOVIL, building
on our existing successful collaboration, to become a stronger
player capable of making the investments required to develop the
Spanish market. I know I can count on Jean-François Fallacher and
the entire ORANGE Spain teams for their full mobilization until the
closing in order to make this deal a success.”
Meinrad Spenger, CEO of MASMOVIL, commented: “To assure leading
telecom infrastructure in 5G and FTTH as well as outstanding
service in Spain, we need strong operators with sustainable
business models. The combination of ORANGE and MASMOVIL would be
beneficial for the consumers, the telecom sector and the Spanish
society as a whole.”
Lazard acted as financial advisor to ORANGE. Goldman Sachs Bank
Europe SE acted as financial advisor to MASMOVIL and BNP Paribas
acted as debt advisor to MASMOVIL.
About OrangeOrange is one of the world’s
leading telecommunications operators with sales of 42.5 billion
euros in 2021 and 140,000 employees worldwide at 31 December 2021,
including 78,000 employees in France. The Group has a total
customer base of 271 million customers worldwide at 31 December
2021, including 224 million mobile customers and 23 million fixed
broadband customers. The Group is present in 26 countries. Orange
is also a leading provider of global IT and telecommunication
services to multinational companies under the brand Orange Business
Services. In December 2019, the Group presented its new
"Engage 2025" strategic plan, which, guided by social and
environmental accountability, aims to reinvent its operator model.
While accelerating in growth areas and placing data and AI at the
heart of its innovation model, the Group will be an attractive and
responsible employer, adapted to emerging professions.
Orange is listed on Euronext Paris (symbol ORA) and on the New
York Stock Exchange (symbol ORAN).For more information on the
internet and on your mobile: www.orange.com,
www.orange-business.com or to follow us on Twitter:
@orangegrouppr.Orange and any other Orange product or service names
included in this material are trademarks of Orange or Orange Brand
Services Limited.
About MASMOVIL GroupMASMOVIL Group is the
operator that has led the growth in Spain for the last years which
offers fixed, Internet broadband, Mobile, tv and new services as
100% clean energy, e-health, home security and personal finance
services for residential, businesses and wholesale through its main
brands: Yoigo, MASMOVIL, Pepephone, Lebara, Llamaya, Lycamobile and
Virgin telco and the regional brands Euskaltel, R, Telecable and
Guuk.In Portugal, MASMOVIL owns the brand Nowo which offers fixed,
and mobile services for residential customers.The Group has
ADSL/fiber fixed networks and 3G,4G and 5G mobile network
infraestructure. It has more than 27M available fiber households
and 18M with ADSL, and its 4G mobile network covers 98,5% of the
Spanish population.
MASMOVIL has also launched its 5G services covering more than
700 cities in the Spanish territory. The Group has more than 14
million customers in Spain after the Euskaltel acquisition.MASMOVIL
has achieved zero net carbon emissions in 2020, positioning as the
first telecommunications operator in Europe to achieve such a goal
and the lowest absolute residual level emissions. In addition, it
is the first telecommunications operator in Europe to become a
B-Corp Company.MASMOVIL is participated by Cinven, KKR and
Providence Equity Partners since November, 2020 with the aim of
accelerating the investment strategy of the Group.
Follow us: MASMOVIL Group website:
https://www.grupomasmovil.com/ Twitter:
https://twitter.com/grupomasmovil
Press contacts: Tom Wright, Orange:
tom.wright@orange.com, +33 6 78 91 35 11 Sylvain Bruno, Orange:
sylvain.bruno@orange.com , +33 6 86 17 88 89Fernando Castro,
Masmovil Group: fernando.castro@masmovil.com, +34 656 160 378
1 TOTEM Spain and MASMOVIL Portugal are not part of the
contemplated transaction2 ORANGE multiples proforma, post TOTEM
carve-out. MASMOVIL multiples proforma MASMOVIL/EUSKALTEL
synergies.3 ORANGE Spain customer data as per ORANGE 2021 Financial
Results Communication. MASMOVIL customer data as per MASMOVIL’s
FY21 Earnings Release.
- PR_Orange_Masmovil_EN_080322
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