Orange and Masmovil struck a deal to combine operations in Spain. They will create a 50:50 joint venture in Spain. As a result, the operators believe they will be able to yield synergies of more than €450 million per year.

In fact, the pair have been in exclusive talks since March on the move. It means that they would create a company valued at around €18.6 billion. Progress on the JV follows months of speculation related to consolidation in the competitive Spanish market.

In a statement, the would-be partners explained the deal included an option to trigger an IPO. It will depend on the resulting operation under set conditions after a minimum of 24 months. Under this clause, Orange would have the right to take control of the company for the price set at the IPO.

Companies explained the benefits of the combination for consumers and businesses. Also, the two pointed to “significant efficiency gains” opening the opportunity to accelerate investments in expanding fiber and 5G. The move comes after a sustained period where operators including Orange and Vodafone Group have bemoaned the strong competition in Spain. We have also reported their tight competition in Spain. Orange CEO Christel Heydemann said the move would create an operator which combined the strengths of the two constituents. He said in the following. “I strongly believe that the creation of this new company is of fundamental importance for the group. Also, it is important for the Spanish telecoms market and for our customers as well.”

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