Zegona has entered into bindings agreements to buy 100% of Vodafone Spain for €5 billion.
The acquisition will be funded through a combination of new debt, Vodafone Financing and a new equity raise.
According to Zegona, it has committed to debt financing of €4.2 billion and a committed revolving credit facility of €0.5 billion. Vodafone will provide up to €900 million financing, while Zegona equity raise of up to €600 million from third party investors to be executed before completion.
Under the terms of the transaction, Vodafone Group will provide a brand licence agreement which permits Zegona to use the Vodafone brand in Spain for up to 10 years post completion. Vodafone and Zegona will enter into other transitional and long-term arrangements for services including access to procurement, IoT, mobile roaming and carrier services.
Commenting on the transaction, Eamonn O’Hare, Zegona’s chairman and CEO, 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. With our clearly defined strategy and proven track record, we are confident that we can create significant value for shareholders”.
Zegona says it aims to “inject highly experienced management” to run Vodafone Spain, including José Miguel Garcia as CEO (ex-Jazztel and Euskaltel CEO).
Completion of the acquisition is conditional on certain approvals being obtained from Zegona shareholders as well as regulatory clearances. Zegona is targeting completion in Q1 2024.
