The European Commission has approved Zegona Communications (LSE:ZEG)' ambitious €5 billion bid to acquire Vodafone Spain after determining there are no reasons for an in-depth competition investigation, reports Spanish paper elEconomista.
British buy-fix-sell fund Zegona first announced the takeover, which is being primarily funded through debt, at the end of October 2023.
Zegona's acquisition of Vodafone Spain is not its first foray into the Spanish telecom market, having returned over £300 million to shareholders after exiting its investment in Basque Country telecoms group Euskaltel to Masmovil in 2021.
Vodafone Group PLC (LSE:VOD) is under pressure from shareholders to dispose of its underperforming assets.
Spain, in particular, has been a challenging market for Vodafone, with consistently falling revenues leading to widespread job cuts.
Vodafone is also mulling options to dispose of its Italian operations, despite rejecting a second bid from Iliad Group earlier this week.
"We are very excited about the opportunity to return to the Spanish telecoms market,” Zegona founder co-founder Eamonn O’Hare said in October. “This financially attractive acquisition marks our third deal in Spain after successful turnarounds at Telecable and Euskaltel.”
Part of this strategy will see Zegona “improve efficiency by reducing complexity and driving productivity”.
Vodafone shares were up 2% on Friday.