16 September 2014
| Kavit Majithia
French operator Orange has reached a deal to acquire fixed-line company Jazztel in a bid to bolster its position in the Spanish market.
Orange will pay approximately
£2.7 billion to secure the acquisition, after winning the
backing of approximately 50.01% of shareholders. The bid values
the company at €13 a share.
The move is designed to help Orange compete more effectively
with Telefónica and Vodafone, after it was left without
a fixed-line offering in the country.
"We are doing this deal to accelerate our growth in Spain,
particularly in fixed-mobile convergent offers," said Stephane
Richard, CEO at Orange.
"The new company will be the incontestable number two in
fixed-line services and third in mobile behind Vodafone, but we
think we’ll be able to take second place pretty
The deal has been accelerated after
Vodafone acquired fixed-line player Ono, and
Telefónica has also been offering bundled fixed and
mobile services in the country.
Jazztel has been rumoured to be interested in
acquiring TeliaSonera’s Yoigo, however it is
now unlikely to pursue the deal.
Orange has ruled out further acquisitions in other countries
after securing Jazztel, with Richard claiming the company is
now well positioned in most of its operating markets.