Although it had recently been commented that Vodafone was one of the operators closest to carrying out the acquisition of Adamo, everything indicates that it has decided to abandon the operation. With this latest decision, the entity continues in the line of decisions in which we have already seen it in recent days.
The Adamo operator, which has a wide network of clients in rural areas, could have been an interesting strategic addition for Vodafone Spain. Since the sale operation was proposed, to which the names of Telefónica Movistar and MasOrange had also been linked, it clearly turned out to be a truly interesting possible purchase. But Vodafone seems to have, in the end, decided to back out of the potential purchase and maintain the status quo it has recently been fitting into. We read about it in Merca2, where sources familiar with the situation have confirmed Vodafone’s refusal to the operation.
Reducing costs
Yesterday we commented that Vodafone had rejected the 5G frequency that MasOrange gave it for free because it would have meant increasing its annual expenses. That already clearly reflects the profile that the operator wants to adopt at this time. Its main objective is to reduce expenses as much as possible and not add new ones that could make the growth curve more complicated. Therefore, this operation would not have caused them any definitive interest either for the amount they were willing to offer or, of course, for the amount that the owner of Adamo was interested in obtaining.
Because Ardian, the French fund managed by Adamo and which had decided to sell the operator’s retail business, had put a value of 300 million euros on it. This figure was, in any case, well above the 100 million euros that Vodafone would have put on the table with the intention of making this acquisition. Ultimately, even for that amount Vodafone would not be interested in making an acquisition that, at this time, does not fit in any way with the savings strategy they are adopting.
A complicated operation
In addition to the cost, which was obviously a difficult barrier to overcome, Vodafone would also have decided to stay out of this operation due to its complexity. It would not be as juicy a move as others that have been seen in recent years in the telecommunications sector and it would have implied inorganic growth that would not fit into Vodafone’s current plans either. On the other hand, by acquiring more spectrum, it would also have to face more fee payments. And, as we mentioned yesterday, it would become an annual problem that would not be interesting in terms of being able to continue reducing debt as much as possible.
Previously, as we said, both Movistar and MasOrange and Digi itself had also been tempted by the possibility, the latter being another of the possible interested parties at the time. But Adamo’s rural business could be having trouble finding a new owner. After all, there was a good chance that it would be Vodafone that would take over the area of ​​real estate units that use the rural operator’s service.
If Adamo is an interesting option, it is because, in the areas where it is present, there are usually not many alternatives. This implies that they are safe customers, which for many operators would be very attractive. In any case, with a value of 300 million and although the sale operation ends in a lower figure, it is still a slightly complex operation. Of course, with Vodafone leaving the equation, it is obvious that other candidates could have an easier time taking over Adamo’s wholesale business.
