Orange Spain and MasMovil sign binding agreement to merge

Orange ES and MasMovil sign binding agreement to merge in 50/50 JV

• Combined EV lowered to EUR 18.7b
• o/w Orange ES excl. TOTEM 7.8b (7.2x 2022E EBITDA AL; 37.1x 2022E EBITDA AL – Capex) + cash EUR 4.20b
• o/w MasMovil incl. Euskaltel 10.9b (8.7x 2022E EBITDA AL, 14.9x 2022E EBITDA AL – Capex) + cash EUR 1.65
• asymmetric payment of EUR 5.85b to Orange & MasMovil embeds equalisation payment to reflect different debt levels.
• Equal governance and right to trigger IPO 24-42 months after closing (Orange right to take control at IPO price).
• Target efficiencies, accelerate investments in FTTH & 5G; synergies 450m EUR/annum from year 4:
• 230m from network (135 from mobile, 85 from FTTH, 10 from transmission)
• 160m from S&M and customer care
• 60m from other (IT, G&A)
• Target leverage 3.5x (net debt / EBITDA).
• To close 23H2.