LONDON: Zegona Communications plc (LSE: ZEG) announced Vodafone ONO, S.A.U. (Vodafone Spain) and MasOrange have signed a confidential non-binding term sheet setting out the proposed key terms for a national network sharing agreement.

The proposed transaction will involve Vodafone Spain and MasOrange creating a joint fibre network company. This will cover approximately 11.5 million premises across Spain and will provide fibre access services to both companies within this footprint. The initial ownership split of the FibreCo between the Parties will be based on their customer numbers within the footprint.

The parties plan to bring a third-party financial investor into the share capital of the new company, with the ownership split post this investment expected to be 50% MasOrange, 40% financial investor and 10% Vodafone Spain.

The new fibre company will benefit Vodafone Spain and MasOrange customers, as well as the Spanish market as a whole. It will guarantee access to the most modern fibre optic network, offering best-in-class quality, and enabling the rapid adoption of new technologies, while stimulating investment and innovation. This network will become a benchmark for sustainable development, meeting high ESG standards thanks to energy savings.

The proposed transaction is subject to final agreement between the parties and any required regulatory approvals.

Eamonn O’Hare, Chairman and CEO of Zegona, commented “Creating this new FibreCo in partnership with MasOrange is a key part of our plan to transform Vodafone Spain. It will deliver a highly efficient fibre infrastructure for our customers with leading fixed line technology which will be at the forefront of the industry. The Proposed Transaction is expected to create significant incremental value for all Zegona stakeholders. We will have more news to share as we progress the transaction to completion.”

Zegona Communications to acquire Vodafone Spain for €5.0 billion