Vodafone Group is on the verge of divesting a minimum of 50% of its Spanish division to Zegona Communications, valuing the business at over €5 billion ($5.3 billion).
The companies are reportedly in the final stages of solidifying the agreement details, with an official announcement anticipated shortly.
London’s Zegona, a company specializing in acquisitions, emerged victorious in the bidding war, surpassing contenders such as private equity firm RRJ Capital, the sources revealed.
However, they cautioned that even though the negotiations are well-progressed, potential delays or breakdowns could still occur.
Vodafone has not immediately issued a comment in response to inquiries made after standard business hours.
A representative for Zegona reiterated the contents of a statement from September 22, in which the company acknowledged its ongoing discussions with Vodafone and its engagement with banks for financing.
Vodafone, headquartered in Newbury, England, has been actively pursuing a transaction in Spain for over a year.
The company’s former CEO, Nick Read, had advocated for market consolidation, but Vodafone found itself excluded when its competitors opted for a merger.
The Spanish unit’s performance has waned in recent years, leading Margherita Della Valle, Read’s successor, to downgrade the division to a smaller European business cluster and initiate a strategic reassessment.
In July, Bloomberg News reported that the British telecom giant was consulting with an advisor to weigh its options for the Spanish business.
Potential suitors included Warburg Pincus and Apollo Global Management Inc., with the latter expressing preliminary interest, according to sources familiar with the matter.
The Spanish telecom sector, already highly competitive, is anticipated to undergo significant changes in the near future.
Orange SA and Masmovil Ibercom SA are currently awaiting regulatory clearance for a merger that would position them as Spain’s leading telecom provider, ahead of Telefónica SA.
