ORANGE and MASMOVIL enter exclusive talks to combine their operations in Spain


The combination would take the form of a 50:50 joint venture, jointly controlled by ORANGE and MASMOVIL (LORCA JVCO), with a combined enterprise valuation of €19.6 billion. Valuations are attractive for both companies, with ORANGE Spain’s enterprise value at €8.1 billion (7.5x 2022E EBITDAaL and 38.7x 2022E EBITDAaL – eCapex) (2) and the enterprise value of MASMOVIL (including the acquisition of EUSKALTEL) of EUR 11.5 billion (9.9x 2022E EBITDAaL and 17.8x 2022E EBITDAaL – eCapex) (2).

ORANGE and LORCA JVCO would benefit from equal leadership rights in the combined entity. Accordingly, neither ORANGE nor LORCA JVCO will consolidate the combined operations.

The agreement between the parties includes (i) a right to trigger an IPO under certain conditions for both parties and (ii) a path-to-control right for ORANGE to consolidate the merged entity in the event of an IPO. ORANGE would not be forced to exit or exercise these options.

The joint venture would bring together the assets, capabilities and teams of the two companies in Spain, building on highly complementary business models and an existing successful collaboration to serve 4.0+3.1 (3) million fixed-line customers (of which 3.0+2.6 convergent), 11.5+8.7 mobile contract customers and almost 1.5 million TV customers.

The joint venture would own network assets that give it a competitive advantage in the marketplace, including:

  • A state-of-the-art nationwide FTTH network reaching over 16 million homes;
  • A state-of-the-art mobile network with full nationwide coverage, serving a large volume of traffic in the Spanish market.

The combined entity would become a stronger player with revenues in excess of €7.5 billion and EBITDAaL in excess of €2.2 billion and would gain the scale and efficiency to:

  • undertake an ambitious and sustainable deployment of its FTTH and 5G networks and
  • contribute to Spain maintaining and further developing a competitive telecommunications infrastructure.

With a comprehensive and complementary brand portfolio, the joint venture would offer Spanish consumers and businesses competitive and differentiated value propositions to meet the needs of all market segments with high-quality connectivity, an excellent customer experience and a comprehensive portfolio of innovative services in the challenging digital landscape.

This joint venture is expected to generate relevant synergies which should reach an annual run rate of over EUR 450 million from the third year after closing.

The transaction is expected to be signed by the second quarter of 2022 and to be completed by the second quarter of 2023, subject in particular to the approval of the relevant administrative, competition and regulatory authorities.

Stéphane Richard, Chairman and CEO of ORANGE commented: “I look forward to establishing this joint venture with MASMOVIL and building on our existing successful collaboration to become a stronger player capable of driving the development of the Spanish to make the investments required by the market. I know I can count on Jean-François Fallacher and the entire ORANGE Spain teams for their full mobilization to completion to make this deal a success.”

Meinrad Spenger, CEO of MASMOVIL, commented: “To ensure a leading telecommunications infrastructure in 5G and FTTH and excellent service in Spain, we need strong operators with sustainable business models. The combination of ORANGE and MASMOVIL would be beneficial for consumers, the telecoms sector and Spanish society at large.”

Lazard acted as financial advisor to ORANGE. Goldman Sachs Bank Europe SE acted as financial advisor to MASMOVIL and BNP Paribas acted as debt advisor to MASMOVIL.

(1) TOTEM Spain and MASMOVIL Portugal are not part of the proposed transaction
(2) ORANGE Multiples Proforma, Post TOTEM Carve Out. MASMOVIL pro forma multiplies MASMOVIL/EUSKALTEL synergies.
(3) ORANGE Spain customer data as per ORANGE 2021 Financial Results Communication. MASMOVIL customer data as per MASMOVIL earnings release for FY21.

About the MASMOVIL Group
MASMOVIL Group is the operator that has led growth in Spain in recent years, providing fixed line, internet broadband, mobile, television and new services as 100% clean energy, e-health, home security and personal finance services for homes, businesses and offers wholesale through its main brands: Yoigo, MASMOVIL, Pepephone, Lebara, Llamaya, Lycamobile and Virgin telco, as well as regional brands Euskaltel, R, Telecable and Guuk.
In Portugal, MASMOVIL owns the Nowo brand, which offers fixed and mobile services to residential customers.
The group has ADSL/Fiber fixed networks and 3G, 4G and 5G mobile infrastructure. It has more than 27 million fiber homes available and 18 million with ADSL, and its 4G mobile network covers 98.5% of the Spanish population.
MASMOVIL has also launched its 5G services covering more than 700 cities in Spain. The group has more than 14 million customers in Spain following the acquisition of Euskaltel.
MASMOVIL has achieved net zero CO2 emissions in 2020, positioning itself as the first telecom operator in Europe to achieve such a target and the lowest absolute residual emissions. It is also the first telecom operator in Europe to become a B-Corp company.
Cinven, KKR and Providence Equity Partners have held shares in MASMOVIL since November 2020 with the aim of accelerating the group’s investment strategy.

Follow us:
MASMOVIL Group website:


Comments are closed.