The deal, valued at €5 billion, comprises a cash consideration of €4.1 billion and up to €0.9 billion in Redeemable Preference Shares (RPS).
Upon completion, Vodafone will continue to provide services to Vodafone Spain under a pre-agreed annual service charge of approximately €110 million to ensure a seamless transition for customers.
Margherita Della Valle, Chief Executive of Vodafone, commented:
“The sale of Vodafone Spain is a key step in right-sizing our portfolio for growth and will enable us to focus our resources in markets with sustainable structures and sufficient local scale.
My priority is to create value through growth and improved returns.”
This move follows Vodafone’s recent transaction in the UK and signifies the company’s commitment to enhancing its competitiveness and growth prospects across Europe.
The deal with Zegona underlines Vodafone’s strategic vision and determination to optimise its assets effectively.
- Financial terms: Vodafone’s consideration for the sale includes a minimum of €4.1 billion in cash and up to €0.9 billion in RPS. The enterprise value of €5 billion reflects a multiple of 5.3x Adjusted EBITDAaL and 12.7x OpFCF for the 12-month period ended 31 March 2023.
- Funding: Zegona has secured fully committed debt facilities of up to €4.2 billion to satisfy the cash consideration. Additionally, Zegona intends to raise equity through an institutional placing of new shares to investors, subject to market conditions.
- Brand license agreement: Post-completion, Vodafone and Zegona will enter into a brand license agreement allowing the use of the Vodafone brand in Spain for a period of up to 10 years.
The completion of the transaction is subject to approvals from Zegona shareholders and regulatory clearances. It is anticipated to conclude in the first half of 2024.
This deal not only underscores Vodafone’s commitment to streamlining its operations but also positions Zegona as a prominent player in the Spanish telecommunications market.
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