The European Commission (EC) is close to ruling on the proposed merger of Orange and MásMóvil in Spain.
However, according to El Pais and Bloomberg, it is likely to impose a series of conditions if it is to approve the merger. As is the case in other transactions in the telecom sector, this could include the sale of assets.
The merger was agreed in July 2022 and is one of the largest transactions in the Spanish telecom sector, being valued at over €18.6 billion.
Significantly, Moody’s has raised the outlook for Orange from stable to positive, and has confirmed its long-term debt ratings at Baa1.
Moody`s believes the impact of the transaction will be largely neutral for the operator’s metrics, and the deconsolidation of close to €1 billion ebitda, generated in Spain, will be offset by the positive impact of the payment agreed in the merger (Orange Spain had no debt), and any cash from potential re-leveraging of the joint venture, as well as the benefits of its improved competitive position in the Spanish market.
