The Singapore sovereign wealth fund, GIC, made headlines by securing a 25% stake in the highly anticipated fibre network joint venture between MásOrange and Vodafone Spain. Referred to as ‘Surf’ internally, this fibre-to-the-home (FTTH) network is poised to be a considerable addition to Europe’s telecommunications landscape.
Formed earlier this year, the joint venture aims to merge the extensive FTTH networks of Vodafone and MásOrange, aiming to reach an impressive 12.2 million premises across Spain. Valued between €8 and €10 billion, this venture will establish itself as the largest fibre network operator in Spain, serving over 4.5 million existing customers.
Obtaining the typical regulatory approvals, the transaction’s completion is projected for Q4 of this year. Boon Chin Hau, Chief Investment Officer at GIC, remarked, “Spain is one of the most advanced European countries in terms of its Fibre to the Home rollout, however, there remains significant fixed broadband penetration growth potential.” This insight echoes the anticipation surrounding the expansion of Spain’s fibre broadband market.
While the exact financial intricacies remain under wraps, it’s estimated that GIC’s stake could be valued between €1.5 and €1.75 billion. MásOrange and its new owner, Zegona, stand to benefit at a substantial scale, with expected returns slated to address existing debts.
Interestingly, GIC’s decision to hold a 25% stake reflects a strategic shift from the initial plans. Initially, MásOrange was to hold 50%, Zegona 10%, and the remainder to a third-party. Due to market conditions, the current arrangement sees MásOrange and Zegona’s stakes increased to 58% and 17%.
