Digi agrees to acquire the assets of Orange and Másmóvil prior to the merger

The pieces are falling into place little by little to close the merger of Orange and Másmóvil almost two years after the first signing. Digi, the fifth telecommunications operator in Spain, has reached a non-binding agreement with the two operators to acquire assets focused on the mobile segment that would pave the way to achieving regulatory ‘green light’ from the European Commission. The two Spanish companies would have the possibility of presenting other alliances with other operators in Brussels, although it would not be probable.

Digi’s parent company, based in Romania, has reached a preliminary agreement to acquire assets, as published by Bloomberg and confirmed by this medium. The pact does not imply that it is definitive and could be stopped by both parties. Official sources from all parties decline to comment on the matter. Both parties have been negotiating for months.

In any case, this acquisition would be related to the mobile business, about which Brussels warned about excessive concentration (in the ‘statement of objections’ presented months ago it eliminated concerns linked to the landline and the wholesaler). Specifically, in recent months a ‘national roaming’ agreement has been considered with advantageous conditions and the acquisition of excess radio spectrum – due to Spanish regulations, they would exceed the limit between both actors.

The logical thing is that the final agreement between the parties is signed and formally presented to Brussels before the end of the year, so everything indicates that the definitive authorization of the Commission could be extended until the first quarter of 2024, when the . two years from the first agreement between the second and fourth operators in Spain. In any case, the deadlines remain unknown. Orange assured in recent months that the definitive closure would be before the end of the year.

This is one of the agreements. Orange and Másmóvil have the possibility of presenting other options to Brussels, although this is not at all common in authorization processes. One of the latest cases was precisely the acquisition of Jazztel by Orange. The only ‘sacrifice’ that was presented to Competition was precisely the sale of fixed assets to Másmóvil, which were decisive in consolidating the latter as the fourth Spanish operator.

It was in June when the Commission made public that it had relevant concerns about the effect of the merger in the retail telecommunications services sector, where it saw risks of “less competitive pressure” that could lead to “large price increases.” “The anticipated anti-competitive effects are substantial, even taking into account possible cost savings, in a context in which competition has been a driver of investment and quality of services in the market,” the regulator explained.