The Spanish government has approved the sale of British mobile phone giant Vodafone’s Spanish division to investment fund Zegona for up to €5 billion.
Digital Transformation Minister José Luis Escrivá said that Madrid had given the green light because the London-based fund has committed to ‘a very substantial investment plan in the telecommunications sector over the medium term, in both fixed and mobile telephony’.
Vodafone announced in October that it had reached a deal to sell its Spanish business to Zegona, which was founded by two former Virgin Media executives, as part of its efforts to streamline its European operations under pressure from shareholders.
Under the terms of the deal the investment fund will pay Vodafone €4.1 billion in cash, and up to 900 million shares in Zegona, which is listed in London. The deal is expected to be completed at the end of May, Vodafone said in a statement.
The company said it now plants to start a €500-million share buyback programme on 15 May as part of its plans to return €2 billion to shareholders over 12 months.
In a further streamlining, Vodafone in June agreed to merge its British operations with Three UK, owned by Hong Kong-based CK Hutchison, to create Britain’s biggest operator with 27 million customers and accelerate rollout of faster 5G connectivity.
The group, which has more than 300 million mobile customers in Europe and Africa, is heavily focused on accelerating rollout of 5G in the UK.
At the end of 2022, Vodafone unveiled a huge deal with investment firms GIP and KKR to form a joint venture that would maintain its majority stake in European masts division Vantage Towers.
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