More fibre consolidation in Spain as Cinven buys utility network

By James Middleton

The Spanish telecoms market continues to be a hotbed of consolidation, as European private equity firm Cinven on Monday announced plans to acquire a fibre network running through Spain and Latin America from Spanish natural gas utility, Gas Natural Fenosa, for €510m.

The Gas Natural Fenosa Telecomunicaciones (GNFT) network is a neutral fibre infrastructure and transmission service catering to telecom operators in Spain and Latin America. After the deal has concluded GNFT will continue providing telecommunication services to Gas Natural Fenosa.

Cinven said it was attracted by GNFT’s unique network with capillary presence in the main metropolitan areas of Spain and Latin America; a consistent organic growth track record; and significant growth opportunity in Latin America as markets are developing and fibre connectivity and capacity demand is increasing fast.

The management will be led by Iňigo García del Cerro, who will continue in his role as Managing Director of GNFT.

Jorge Quemada, Partner at Cinven, said of the acquisition: “GNFT is a well invested fibre business in Spain with strong cash flow generation. The Company also has exposure to high growth markets in Central and South America. Our [company] and Spanish teams have worked closely together to identify the investment opportunity in GNFT. We have invested successfully in telecom businesses such as Ziggo in the Netherlands and Numericable in France in the past and believe this will considerably benefit the growth of GNFT. ”

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Spain has seen plenty of consolidation of late. In May, Spanish media group Prisa accepted incumbent operator Telefónica’s €725m bid for its 56 per cent stake in pay TV platform Canal+’s holding company Distribuidora de Televisión Digital (DTS).

The acquisition of Canal+, formerly known as Digital+, will establish Telefónica as the major pay TV operator in Spain, combining the satellite platform with its Movistar Fusión TV service, combining the Canal+ base of 1.6 million homes with the Fusión TV base of 670,000.

Meanwhile Vodafone’s €7.2bn acquisition of Spanish cable player Ono, which offers high speed broadband and pay-TV services, is ongoing. Vodafone said the acquisition will give it a time to market advantage when launching products and services in Spain. The operator group also intends to capitalise on Ono’s distribution and marketing capabilities and aims to cross-sell products and services to each company’s customer base. Vodafone estimates revenue synergies with a total net present value of approximately €1bn.