It advances more than 7% before its negotiations with Iliad in Italy and Hutchison in the United Kingdom
The Spanish group leads the Ibex 35
Vodafone has started the week with strong increases in the stock market due to possible mergers in key markets such as Italy and the United Kingdom, and has pulled other competitors such as Telefónica into the market.
Thus, the British giant has risen more than 7%, by almost 3% of Telefónica and BT, 2% of Orange, and close to 1% of Telefónica Deutschland, the Dutch KPN and the Belgian Proximus. Telefónica, in fact, is the best value of the Ibex 35, which is down more than 1% at the beginning of the week, given the geopolitical tensions arising from the possible invasion of Ukraine by Russia.
In this sense, Vodafone has started negotiations for the merger of its Italian division with the subsidiary in the country of Iliad, according to Reuters. The integration would give rise to a new operator with a 36% share of the mobile market in Italy, with annual revenues close to 6,000 million euros.
Both telecoms maintain active negotiations for this integration in Italy, one of the most fragmented and competitive markets in Europe, along with Spain. Iliad, which will launch its fixed broadband services in Italy this week, is working with Lazard on the design of its strategic plans in the transalpine country.
It is not the only movement that Vodafone seems to have considered. According to Bloomberg, the teleco also recently explored a merger of its UK division with Hutchison Three. This transaction has already been contemplated by the financial markets over the last few years, especially after the agreement between Vodafone and Hutchison to integrate their divisions in markets such as Australia.
The mergers of mobile network operators in different European countries have been rejected by the Community competition authorities. Brussels marked doctrine by preventing the merger of O2, the British division of Telefónica, and the aforementioned Hutchison Three in 2016 because it meant reducing the number of mobile network operators from four to three, with the consequent impact on competition.
Now, the operators of different countries, including the Spanish, have demanded a regulatory change that facilitates mergers, given the stiffening of competition, with the consequent impact on income. The telcos have warned that, if the current scenario continues, investments in new fiber or 5G mobile infrastructures are being put at risk.
In the Spanish market, the main movement in recent years has been the purchase in 2021 of Euskaltel by MásMóvil, which reinforced its position as fourth operator, putting pressure on the position of the third, in this case Vodafone itself.