Back in March, Orange Spain and MásMóvil announced their intention to merge, forming a 50:50 joint venture with an enterprise value of roughly €20 billion. 
The deal would create a converged operator with around 7.1 million fixed line customers and 20.2 mobile customers, as well as 1.5 million TV customers. 
Orange’s tower company, TOTEM, would notably be excluded from the merger…

Back in March, Orange Spain and MásMóvil announced their intention to merge, forming a 50:50 joint venture with an enterprise value of roughly €20 billion. 

The deal would create a converged operator with around 7.1 million fixed line customers and 20.2 mobile customers, as well as 1.5 million TV customers. 

Orange’s tower company, TOTEM, would notably be excluded from the merger, as would Orange Bank and MásMóvil’s Portuguese operations. 

Nonetheless, this would represent an enormous dynamic shift for the Spanish telecoms market, consolidating a telecoms market that has long been considered one of the most competitive in Europe and creating a new market leader. As such, any deal is expected to face significant regulatory scrutiny, but before this can even be considered a formal agreement needs to be made – a process that is proving slower than first anticipated, largely due to delays in achieving the required financing. 

Last month, following the requisite due diligence, the two operators announced that they were seeking a €6.5 billion loan to help facilitate the merger. However, with the global economy currently experiencing surging inflation and widespread geopolitical uncertainty, banks are being cagier than ever when it comes to investments in 2022. 

According to sources, French banking group BNP Paribas has been leading the financial operation to get the loan from around a dozen total banks, including Societe Generale, Crédit Agricole, JP Morgan, Goldman Sachs, Santander, BBVA, and La Caixa.

Now, reports from El Economista suggest that the financing deals are expected to be finalised later this week, with anonymous sources telling the newspaper that “if everything goes as expected, the agreement [with up to a dozen banks] could be done next week”. 

If such financing does materialise, then the merger proposal will likely proceed directly to the European Competition Commission for approval, likely bypassing Spain’s National Commission for Markets and Competition due to its sheer scale. 

Whether or not it will receive the green light without incident is unclear, with analysts previously suggesting that a tie-up between Vodafone and MásMóvil would be more likely to succeed, potentially requiring less significant concessions to retain a high level of market competition.

However, European regulators have been somewhat mellowing in recent years and, given the highly crowded nature of the Spanish market, it is highly unlikely that they will block the deal outright or apply severe restrictions.

In fact, even Vodafone Spain, which will be left in third place if the market goes head, has been positive about the deal, suggesting that the market has long been ripe for consolidation and that the merger will open up the market to additional investment. 

Today, reports from Bloomberg suggest that the government is seeking yet more information about billionaire Patrick Drahi’s increasing stake in BT. 
The official deadline for the national security investigation’s conclusion was roughly a week ago, with the government now suggesting it needs more time to reach a conclusion.
French-Israeli billionaire Patrick Drahi first took a stake in BT back in the summer of 2021, specially forming Altice UK in order to buy a 12…

Today, reports from Bloomberg suggest that the government is seeking yet more information about billionaire Patrick Drahi’s increasing stake in BT. 

The official deadline for the national security investigation’s conclusion was roughly a week ago, with the government now suggesting it needs more time to reach a conclusion.

French-Israeli billionaire Patrick Drahi first took a stake in BT back in the summer of 2021, specially forming Altice UK in order to buy a 12.1% stake for £2 billion. 

The investment immediately triggered warning bells for BT’s management, with many onlookers suggesting that this initial investment from Drahi was merely a prelude to a larger takeover attempt later in the year. 

Drahi, however, was quick to allay these fears, saying that he had no intention of launching a takeover bid. Following this statement of intent, UK law dictated that Drahi could not further increase his stake for six months, giving BT a window in which to shore up their defences.

But when the six-month deadline arrived, BT were not faced with the dreaded takeover bid but rather Drahi’s next step in stake-building, with the billionaire seeking to increase his stake from 12.1% to 18%. Once again, Drahi said that he had no interest of taking over BT, thereby removing his ability to increase his stake for another six months. 

However, before this latest deadline could arrive in June this year, the UK government intervened, with business secretary Kwasi Kwarteng using new powers granted by the National Security and Investment (NSI) Act 2021 to investigate stake increase on the grounds of national security. The results of the probe could see conditions imposed upon the deal, or even block it entirely.

This investigation was expected to have concluded by the start of July, but it seems the government wants yet more information before making their decision. A new deadline for the investigation’s conclusion has yet to be announced. 

A similar investigation into Nexperia’s purchase of Newport Wafer Fab, announced at a similar time to the BT probe, is also being delayed.

The investigation comes at a time of great uncertainty for both BT and the UK government itself. 

Last week saw UK ministers resign in droves, forcing the resignation of prime minister Boris Johnson and triggering a leadership race within the Conservative party. Kwarteng was notably not among the list of over 50 MPs who resigned.

Meanwhile, BT could be facing its own internal uprising, with the Communication Workers Union (CWU) confirming at the end of last month that workers were prepared to strike after BT announced that workers would receive a flat raise of £1,500 for 2022 – a pay cut in real terms, given the UK’s inflation of over 11%. 

At the end of last week, the CWU said that BT had until the 13th of July to enter formal negotiations over pay, or else see strikes implemented. 

« In short, next week we will either enter into serious negotiations with the company or we will announce strike action. The ball is firmly in the company’s court, » said the CWU in an email to members. 

Want to find out all the latest action from the UK telecoms industry? Join the discussion with the operators themselves at this year’s live Connected Britain conference 

Also in the news:

Earlier this week, UK full fibre builder CityFibre announced the appointment of Vicky Higgin as Chief Digital and Information Officer and Executive Director. Vicky joins CityFibre from National Highways where she has been working as CDIO until now. 
& …

Earlier this week, UK full fibre builder CityFibre announced the appointment of Vicky Higgin as Chief Digital and Information Officer and Executive Director. Vicky joins CityFibre from National Highways where she has been working as CDIO until now. 

Prior to her role at Highways England, Vicky has worked in various roles at National Grid, most recently as CIO & VP IT Transformation.

Commenting on her appointment, Vicky said: “It’s a fantastic time to be joining a company growing at such a phenomenal rate. There is a huge opportunity for CityFibre to put in place an IT framework that futureproofs it for the next decade and offers our customers a level of service they can’t find elsewhere on the market. I am looking forward to working with every team at CityFibre and placing IT enablement at the heart of our future-thinking mindset.”

Greg Mesch, Chief Executive Officer at CityFibre added: “We’re building a digital infrastructure platform that sets a new standard in the market and our IT strategy is critical as we deliver that vision. That’s why we’re delighted to welcome Vicky to CityFibre’s management team. Vicky’s experience of leading innovative IT transformation projects in infrastructure businesses couldn’t be better suited to our business and speed of development.”