The French company, which operates in Belgium through its subsidiary Orange Belgium, has just paid €1 billion for VOO SA, the telecommunications operator that owns the cable network in the Walloon and Brussels regions. With this deal, the French telecom specialist continues its foray into the Belgian market. Experts at AURIS Finance take a closer look.
2021 will have been a frenetic year for the M&A market. In many sectors, M&A activity has been at a pace not seen since before the 2008 financial crisis. The telecom sector is no exception, as demonstrated by Orange Belgium’s acquisition of 75% of VOO SA (owned by Nethys) on 24 December. The value of the transaction is estimated at €1 billion.
Complementary assets and a specific corporate culture
“Thanks to the acquisition of VOO, Orange Belgium will have a very fast Internet network in Wallonia and part of Brussels, thus strengthening the implementation of its convergence strategy at national level,” the Orange Group stated ambitiously in a press release. The Group already has 3.3 million mobile customers in Belgium and Luxembourg. In the immediate aftermath of the acquisition, Orange highlighted the many potential synergies offered by the combination of the two entities: “Orange’s industrial project, the complementarity of the assets and teams, and the corporate culture of the two companies will offer attractive prospects for the employees of VOO and Orange Belgium”.
Sharp rise in mergers and acquisitions in the telecom sector
The telecommunications sector has been on the move since 2018. In France, there have been a number of major acquisitions, including Altice and Illiad, for amounts close to €3 billion. The presence of investment funds targeting telecom companies is a strong emerging trend in Europe. Spain’s MasMovil, for example, is now owned by a trio of private equity funds for a total of €5 billion. Another major market move was the acquisition of Dutch operator T-Mobile by funds Warburg Pincus and Apax for a company value of €5.1 billion. Finally, the biggest offensive in the telecom market remains the one launched by the US fund KKR against Telecom Italia (TIM).
A wave of acquisitions in 2022
Experts are predicting a large number of acquisitions in the telecom sector in 2022. These include Vodafone in the UK and KPN in the Netherlands, both of which are targets of investment funds. The value of these acquisitions is rising sharply. This is due to two factors: firstly, telecom companies have been undervalued on the stock market and secondly, investment funds are flush with cash. For example, the US fund KKR is prepared to spend around €33 billion to acquire Telecom Italia, which would make it the largest LBO (leveraged buyout) ever attempted in Europe.
Telecom companies: Choosing your investors
In addition to these major deals, smaller companies are also attracting investors: large groups and investment funds. The market is currently very dynamic. If you don’t want to miss out on a sale opportunity, let AURIS Finance’s experts help you. Thanks to their sector expertise, they will be able to advise you on the specific issues of the telecom sector.
