Orange and MasMovil sign $19b merger deal in Spain

Orange and MasMovil have signed a binding agreement to combine operations in Spain in a deal valuing the merged entity at close to $19 billion, the two telecoms firms said in a statement on Saturday.

The merger creates a heavyweight spanning mobile and broadband, posing a challenge to top player Telefonica and analysts say possibly opening the way to similar alliances in markets such as Italy, Portugal and the UK, reports Reuters.

The merger of the second and fourth largest telecoms operators respectively also leaves third-ranked Vodafone stranded, albeit the beneficiary of a more consolidated market that is expected to reduce competition and boost operators’ profitability.

The tie-up is expected to test the European Commission's appetite for consolidation. It has previously opposed deals that reduce the number of players from four to three in major markets.

Spain's mobile market is a four-way fight with Telefonica's Movistar brand holding a 28.24% share, Orange 22.91%, Vodafone 22.26% and MasMovil with 20.55%, data from market regulator CNMC showed in March.