Vodafone terminates Greek merger discussions
06 February 2012 |
Vodafone has terminated discussions for a merger of its Greek subsidiary with local provider Wind Hellas.
It is thought that talks were stopped after concerns were expressed by regulators.
Reports of merger discussions between the two companies first emerged at the end of August, with Wind Hellas valued in the region of €1 billion. Back then analysts warned that a merger would be unfavourable as it would return the Greek market to duopoly status and raise tariffs at a time when consumer spending is at an all time low.
Local sources claim that the two companies are still continuing talks to share networks. This is likely to be a more favourable option for regulators, which are seeking to maintain competition.
Vodafone Greece has a market share of 26.3% with Wind Hellas taking 23.1%. The remaining 50.6% is held by operator Cosmote, which is co owned by Deutsche Telekom and Greek incumbent telco OTE.
Wind Hellas, which has around four million subscribers, was until the end of 2010, part of the Weather conglomerate, owned by Egyptian billionaire Naguib Sawiris. Weather initially acquired Wind Hellas out of an earlier bankruptcy. Wind Hellas’ principal shareholders took control of the company in December 2010 and injected a cash investment to ease Wind’s debt and fund long term development plans.
The merger talks between the two companies are part of a continuing trend of consolidation for European operators, sparked by falling revenues from a weak economy, the need to bid for spectrum and the cost of rolling out 4G network upgrades. Last week Hutchison Whampoa merged its Austrian operations with Orange Austria in a deal worth €1.3 billion.
3h | James Pearce
3h | James Pearce
6h | Alan Burkitt-Gray