Orange and Masmovil received a green light from the European Commission (EC) for a merger of their respective operations in Spain subject to conditions they already agreed to, with the pair targeting completion by end-Q1.

Under the package of concessions, various spectrum assets held by Masmovil will be divested to Digi Communications, which runs the largest MVNO in Spain alongside providing fixed services. Orange will also offer the recipient a national roaming agreement.

A transfer of frequencies is subject to final approval from Spanish authorities.

The EC indicated strengthening Digi “compensated” for the merger of Masmovil and Orange’s operations, concluding the concessions meant the proposed transaction no longer raised competition concerns.

EC EVP in charge of competition policy Margrethe Vestager added “commitments offered by the parties will enable Digi, the largest and fastest-growing MVNO in Spain, to replicate the strong competitive pressure exerted by Masmovil”.

This, she claimed, would “ensure that consumers in Spain continue to benefit from a competitive telecom market, in terms of prices, quality and 5G connectivity”.

Orange noted the 50:50 joint venture to be formed by the combination with Masmovil would have a customer base of more than 7.3 million in the fixed market and 30 million in the mobile segment. The pair expect to realise synergies of €450 million per year from the fourth year after closing.

The deal excludes Masmovil’s operations in Portugal and local assets held by Orange’s Totem tower business.

Orange CEO Christel Heydemann stated the announcement “is a crucial moment for the future development of the Group in Europe” adding it would “create a single, stronger and more sustainable player in Spain”.