MasOrange, Vodafone, and GIC create Spain’s largest fiber optic company: advisors

MasOrange, Vodafone Spain, and GIC have signed an agreement to create a fiber optic company in Spain (FibreCo). Under the terms of the agreement, the parties will have the following approximate shareholdings: MasOrange 58%, Vodafone Spain 17%, and GIC 25%.

MasOrange and Vodafone Spain will jointly contribute some 12 million real estate units and nearly 5 million customers to the new fiber network joint venture. The network will be dedicated exclusively to both operators, which will also continue to maintain and operate the infrastructure that each has contributed to FibreCo.

Financing and use of funds

FibreCo will have an efficient capital structure with more than €5 billion in net debt, most of which is investment grade. Nearly 20 global banks have participated in the financing, demonstrating exceptional support from the financing entities.

As part of the transaction, MasOrange will acquire Conexus Networks, the wholesale provider of FTTH access in northern Spain, and will contribute it to FibreCo.

As committed by MasOrange, the €3.2 billion net proceeds from the FibreCo transaction will be used entirely to repay debt, ensuring a sharp reduction in leverage in line with the Group’s tight target of bringing its medium-term debt ratio to 2.75x. FibreCo will be completely deconsolidated from MasOrange’s accounts.

Advisors

Cuatrecasas advised Vodafone with a team consisting of partner Federico Roig, senior associate Pedro López-Dóriga, and Pablo del Moral (Corporate M&A); partner Irene Moreno-Tapia and Paula Wignall (Competition); and partner Enrique Carrera, Julene Areitio, and Mario Mas (Competition and Foreign Direct Investment).

Linklaters advised MasOrange. The team was led by corporate partners Sebastián Albella Amigo and Carmen Burgos, and managing associate Celso Méndez S-C, with significant involvement from the tax team (led by partner Javier García-Pita Ripollés and associate Marta España Boronat) and the competition team (led by Fredrik Löwhagen).