In July last year, Orange and Masmovil had signed a binding agreement to combine their operations in Spain
The competition authorities of the European Commission will make an in-depth review of the proposed merger between Spanish operators Orange and MásMóvil, according to a Reuters report.
According to the report, a preliminary review into the Orange-MásMóvil merger is already underway, with the European Commission set to initiate a more in-depth investigation following the end of its preliminary review on April 3.
The European body also confirmed to Reuters that it will also reject the request of the National Commission for Markets and Competition (CNMC) to take charge of the analysis of the merger.
MásMóvil and Orange had already announced that the operation would not close until the second half of 2023.
Orange and MásMóvil had previously claimed that the proposed merger will not mean a reduction in the number of network operators in Spain, since there are at least eight companies that offer fixed-mobile services in the domestic market.
Also, the head of rival operator Telefonica, José María Álvarez-Pallete, had recently stated that the merger between Orange and MásMóvil should be approved without or minimum conditions, since the Spanish market has strong competition in terms of infrastructure.
In July last year, Orange and Masmovil had signed a binding agreement to combine their operations in Spain. The telcos had started negotiations in March 2022. The transaction is based on an enterprise value of 18.6 billion euros ($19.6 billion).
Under the terms of the deal, the 50-50 joint venture stipulates that both operators will have equal governance rights in the combined entity. The agreement also includes a right to trigger an IPO under certain conditions for both parties after a defined period and, in such a scenario, an option for Orange to take control of the combined entity.
The operators noted that the new entity would lead to significant efficiency gains, allowing the combined company to accelerate investments in FTTH and 5G technologies.
The companies’ due diligence process showed potential synergies in excess of 450 million euros per year to be reached by the fourth year post closing of the merger, according to the two operators.
Orange has already deployed its 5G services in 1,844 towns and cities in 52 provinces across Spain. The telco’s 5G network infrastructure reached 78.4% of the Spanish population as of the end of the last quarter of 2022.
Orange recently said it expects to reach 11 cities with 5G Standalone (SA) by the end of the year. Orange Spain launched its 5G SA network in February, initially covering parts of Madrid, Barcelona, Valencia and Seville.
Meanwhile, Masmovil is currently offering 5G service in 1,660 towns and cities in 51 provinces across Spain for the customers of its Yoigo brand.
According to the operator, 74% of the Spanish’s population is already covered with its 5G network infrastructure.
The carrier’s 5G service is being offered via a combination of its own infrastructure and an agreement with Orange. Masmovil currently has 80 megahertz of spectrum in the 3.5 GHz band to use for 5G services nationwide.
