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Spain: Orange eyes Jazztel

March 12, 2014

From David Del Valle in Madrid

Whilst ONO decides to accept or not Vodafone’s purchase bid of around €7 billion, a new consolidation move is envisaged in the Spanish telco market.

France’s biggest telco company and Spain’s third largest (after Telefonica and Vodafone), Orange, is reportedly eyeing Jazztel for a possible takeover with a value estimated at around €2,500 million. TeliaSonera, main shareholder in Yoigo, could also be interested in the operation through a joint venture.

With the move, Orange is trying to avoid being left out of the consolidation wave in the Spanish telco market and become one of its key players.

Jazztel’s shares have jumped as much as 4 per cent following mounting speculation about an Orange bid. Any such deal would see Orange  become the second biggest telco in Spain with a share of 25 per cent in broadband (3 million clients) and 26.4 per cent in the mobile market with 13.8 million mobile users (12.4 million from Orange and 1.4 million from Jazztel).

By comparison, ONO-Vodafone combined would have a share of 21 per cent in the broadband market with around 2.4 million users and 26 per cent in mobile with 13.5 million mobile users. The agreement with ONO would open the door to Vodafone to breaking into the TV market again with around 900,000 pay TV subscribers from ONO.

Categories: Articles, Broadband, Business, M&A, Telco