M&A spree in the telecoms market

The telecommunications sector is has found itself in a new cycle of acquisitions and mergers at the European level, as well as in Greece.

The intense movement of providers across Europe, driven by heightened competition and the need to cut costs, has been compared by analysts to the barrage of mergers and acquisitions recorded in 1999. Just in the last few months Swisscom agreed to buy Vodafone’s operations in Italy for around 8.5 billion euros, France’s Orange merged with Masmovil in a transaction valued at €19 billion, and Telecom Italia sold its landline network to US investment fund KKR.

In Greece, the companies expected to change hands include Nova, as part of the divestment of Nikos Stathopoulos’ BC Partners from the telecommunications and audio-visual content provider United Group, which owns the telecommunications provider.

The acquisition of United Group was completed in March 2019 by BC Partners, which (through United Group) acquired Nova in November 2020. As Stathopoulos has mentioned, the divestment from United Group, five years after its acquisition, is a “normal development for an equity fund”.

The process followed by BC Partners involves two parallel paths. The first (Plan A) concerns the sale of United Group and the second (Plan B) the eventual sale of United Group’s assets separately, mainly the Greek Nova. The possible change of ownership of Nova for the second time in a few years is expected to redefine, to some extent, the balance in the Greek telecommunications market, depending on the strategy of its new owner.

The Athens-listed OTE group, controlled by Deutsche Telekom, is also making its own significant contribution to mobility at the European level, which is launching the sale of Telekom Romania Mobile Communications (TRMC), its subsidiary focused on the provision of mobile and data services in Romania.

As the listed telecommunications group announced a few days ago, the new prospective buyer for Telekom Mobile Romania is West Network Invest, an investment scheme where Digi Romania (Digi) holds a majority stake and Clever Media Group has a smaller one.

Digi is Romania’s largest fixed-line operator, and a potential merger with TRMC would give it a leg up on Orange Romania, the local mobile market leader with 9.5 million customers.