Vodafone agrees merger with Melita in Malta

News General Malta 24 MEI 2017
Vodafone agrees merger with Melita in Malta

Apax Partners, Fortino Capital and Vodafone Group announced an agreement to combine cable, broadband and pay TV provider Melita and mobile operator Vodafone Malta. The combined company's business will operate under the Vodafone brand, offering quad-play bundled mobile, fixed broadband, fixed telephony and TV services to Maltese consumers and a full range of enterprise services for businesses and the public sector. 

The combined company will be in a stronger position to compete with Go. The proposed merger follows the start of Vodafone Malta offering fixed internet and telephony for homes and small offices in September 2016 and is line with Vodafone's group strategy of expanding in fixed, and particularly cable, markets. 

The new company is expected to be able to generate cost synergies through the rationalisation of overlapping activities and greater network investment efficiency as it introduces 4.5G, and subsequently 5G, mobile networks and gigabit-capable fixed networks.

Existing Melita CEO Melita, Harald Rosch, will be proposed by Melita as CEO and Vodafone intends to appoint the Vodafone Malta CFO, Caroline Farrugia, as CFO of the new company. Vodafone will announce a new role for Amanda Nelson, the existing CEO of Vodafone Malta, in due course.

At completion, the existing shareholders of Melita will own 51 percent of the combined company and Vodafone Europe, the current shareholder of Vodafone Malta, will own the remaining 49 percent. The transaction gives Vodafone Malta an enterprise value of EUR 208 million and Melita an enterprise value of EUR 298 million.

At completion, the combined company's net debt is expected to be approximately EUR 345 million and Vodafone will receive an estimated cash payment of EUR 120 million which will be used for general corporate purposes. Melita's shareholders will receive an estimated cash payment of EUR 33 million.

The combined company will not be consolidated in Vodafone's accounts and will be reported on an equity accounting basis after completion of the transaction. The transaction is not expected to have a material impact on Vodafone Group's free cash flow or earnings.

The transaction is conditional on approval from the Malta Competition and Consumer Affairs Authority and is expected to close in the second half.

Categories:

General

Companies:

Vodafone Group,  Melita,  Vodafone Malta

Countries:

Malta

Tags:

Production planning & operations, Voice services, Data services, Internet Access, M&A buyouts & divestments, Officers & directors

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