In a move aimed at resolving EU antitrust concerns over their Spanish merger, French telecoms group Orange and Spanish peer MasMovil have selected Romania’s Digi as the prospective buyer for the assets they plan to divest. This development was disclosed by two individuals familiar with the situation on Tuesday.
The deal is being closely watched as a litmus test of whether EU antitrust regulators are willing to adopt a more lenient stance towards mergers that reduce the number of mobile players in a country from four to three. Regulators have expressed apprehensions that such a reduction may result in decreased competition within the market. Orange and MasMovil, Spain’s second and fourth-largest telecom providers, initially unveiled their merger, valued at 18.6 billion euros ($19.7 billion), in July 2022, reported Reuters.
The European Commission had issued a warning in June to both companies, suggesting that their merger, which would trim the number of mobile providers in Spain from four to three, had the potential to diminish competition and elevate prices in the Spanish telecommunications sector.
On Tuesday, the EU competition enforcer, which paused its investigation into the merger in July, awaiting additional information from the companies, and MasMovil declined to offer any comments on the matter.
The divestment plan laid out by Orange and MasMovil entails the sale of spectrum, a customer unit, and a brand, in addition to providing Digi with access to vital infrastructure resources. It should be noted that the specific details of this package have yet to be finalized, and certain elements of the deal may still undergo changes. Orange has clarified that its European masts company, TOTEM, is not part of the agreement with MasMovil.
Orange and MasMovil, who stand as direct competitors to Telefonica and Vodafone Spain, have been in discussions with various potential buyers for these assets in recent months. Among the contenders, Digi, Avatel, and other smaller rivals have been considered. The outcome of this agreement will hold significant implications for the future landscape of Spain’s telecommunications industry.