Vodafone has entered into a preliminary agreement with Digi to acquire Telekom Romania Mobile. The plan between Vodafone and Digi involves acquiring different parts of the business.
“Vodafone Romania and Digi Romania have today signed a Memorandum of Understanding (MoU) with Hellenic Telecommunications Organization (OTE) in relation to potentially acquiring separate parts of its 100% subsidiary Telekom Romania Mobile Communications (TKRM),” Vodafone stated. This MoU indicates that Vodafone may acquire the majority of the company, while Digi would acquire specific assets.
OTE, the parent company, announced its intention to sell almost a year ago to focus on its primary market in Greece. Initially, OTE negotiated with Quantum Projects Group but later switched to Digi after the initial talks faltered.
However, Digi joining forces with Vodafone raises questions. From a regulatory perspective, the deal structure will be crucial. Romanian market regulations could pose a challenge as Digi already has a strong presence in the mobile space. A merger with TKRM could position Digi as the leading market player, overtaking current leaders Orange and Vodafone itself.
Interestingly, Vodafone, led by CEO Margherita Della Valle, has aimed to streamline operations. This potential acquisition seems contradictory since the company has been withdrawing from markets like Spain and is planning an exit from Italy. Additionally, Vodafone is involved in a significant merger with Three in the UK.
The MoU stage reflects that both companies need to engage in thorough due diligence. “The parties still need to complete detailed due diligence and discussions remain at an early stage. There is no certainty that a transaction will be agreed,” Vodafone cautioned. Given previous obstacles in the TKRM sale process, this caution is well-founded.
