Zegona acquired Vodafone Spain in the first half of 2024 for a value of 5,000 million euros. This acquisition was very important for the company, since it consolidates it as an important player in the telecommunications business in our country. Part of the money they had to pay Vodafone to obtain the Spanish subsidiary has been used to maintain the brand name. How much has it cost Zegona to maintain Vodafone’s corporate image?
On May 31, 2024, the British investment fund, chaired by Eamonn O’Hare, completed the purchase of Vodafone Spain. It did so after receiving regulatory approval from the Government of Spain, the European Commission and the National Markets and Competition Commission (CNMC), although they had already announced their intentions at the end of 2023.
Several months later, the British group Vodafone has published the financial report corresponding to the first half of its fiscal year 2025. There, the 5,000 million euros that Zegona paid to buy Vodafone Spain are broken down. According to the document, 400 million euros of what it cost was to continue using the trademark in our country and another series of services.
The breakdown of the 5,000 million euros paid by Zegona
From what is read in the report, Zegona has paid 4,069 million through cash consideration. In addition, it has given 900 million in the form of redeemable preferred shares, which will be amortized six years after the closing of the sale at the latest. Of the capital delivered in cash, the document details that up to 400 million euros grant Zegona the license to use the Vodafone brand over 10 years.
These 400 million are not only intended for Vodafone Spain’s image, but are also used to maintain supply services. As O’Hare highlighted at the end of 2023 when announcing the purchase of the telecom, these services include access to contracting, IoT (Internet of Things), mobile roaming (roaming) and operator services.
Preserving Vodafone’s brand image is important. Otherwise, the average Spanish user would not be able to identify the company with another logo and name. Initially, Zegona will continue this for a decade. After the 10 years agreed upon in the acquisition pass, it is not known what will happen.
Other important data from Vodafone’s fiscal year 2025
In addition to reporting the purchase money that has been used to maintain the brand, Vodafone has carried out other important money movements in the first half of the fiscal year 2025. With the income they have received, the British group has started a share buyback plan of up to 2,000 million euros.
In sum, the company has planned new share buybacks valued at another 2 billion euros. But these will not take place until early 2025, when the sale of its business in Italy is expected to be finalized. In the case of Vodafone’s Italian unit, the buyer is Swisscom, which will merge the red operator with its Italian subsidiary Fastweb. According to the agreement, Swisscom intends to finance the purchase with debt and will pay it in cash.
According to data released, Vodafone has completed an initial tranche of €500 million in share buybacks so far this fiscal year. Likewise, they are in the process of a second tranche, also of 500 million, which they plan to complete this November.
