VODAFONE SPAIN has been sold to UK telecoms investor Zegona Communications in a deal valued at up to €5 billion.
Zegona will pay at least €4.1 billion in cash and a further €900 million in financing taking the form of preference shares.
Vodafone chief executive Margherita Della Valle said the move was a further step in ‘right-sizing our portfolio for growth’ as she tries to boost the company’s profits.
Vodafone Spain is the third biggest telecoms network in the country after Movistar-Telefonica and Orange.
The group launched a strategic review of the business in Spain earlier this year after suffering hefty sales falls, blaming a highly competitive market.
Zegona and Vodafone have also agreed that the main Vodafone group will provide ‘certain services’ to Vodafone Spain for an annual service charge of around €110 million, which includes allowing them to continue using the brand for the next decade.
Zegona is led by former Virgin Media executives Eamonn O’Hare and Robert Samuelson.
Mr O’Hare, who is chairman and chief executive of Zegona, said: “We are very excited about the opportunity to return to the Spanish telecoms market.
“This financially attractive acquisition marks our third deal in Spain after successful turnarounds at Telecable and Euskaltel,” he added.
Zegona’s aim is to ‘transform the business’ to offer ‘exceptional service to customers and attractive returns for investors’ through ‘highly experienced management’ and to ‘boost productivity and stabilise revenues with new commercial initiatives’.
The former Euskaltel and Jazztel CEO, Jose Miguel Garcia, will lead the new-look Vodafone Spain with the deal expected to be concluded in the first half of next year.