Telefónica has obtained the backing of its core shareholders for a potential acquisition of Vodafone Spain, a move that would represent the cornerstone of the company’s new strategic plan under recently appointed chairman Marc Murtra.
According to sources close to the shareholders, Spain’s State Industrial Holding Company (SEPI), CriteriaCaixa, and Saudi Telecom Group (STC) have expressed support for the operation, provided that the transaction is executed at a reasonable price. Vodafone Spain is currently owned by British investment firm Zegona, El Confidencial reported.
Engagement with Government Officials
Murtra has reportedly held meetings with senior Spanish government representatives, including Manuel de la Rocha, chief economic adviser to the Prime Minister’s Office, and Óscar López, Minister for Digital Transformation and Public Administration. The discussions centered on Telefónica’s interest in acquiring Vodafone Spain.
Any transaction would require approval from both the Spanish National Markets and Competition Commission (CNMC) and, more decisively, the European Commission. While the CNMC is expected to take a limited role, the final decision is likely to rest in Brussels, given that the acquisition would reduce the number of major operators in Spain from four (Telefónica, Masorange, Vodafone, and Digi) to three.
Strategic Rationale
Murtra, who assumed the chairmanship in February, has repeatedly underlined the importance of telecommunications sector consolidation in Europe. He argues that true competitive and financial benefits arise from intra-market consolidation—mergers within individual countries—rather than cross-border deals. These benefits, he notes, include reduced labor and network costs, improved margins, and stronger cash generation.
In July, Murtra stated that Telefónica was “well positioned to lead the mission” of sector consolidation. However, when asked directly about acquiring Vodafone Spain, he described media reports as “speculative.”
Market Reactions and Challenges
Vodafone Spain’s parent company, Zegona, has strongly denied sale rumors. José Miguel García, its chief executive and former head of Jazztel, dismissed the reports as “unfounded,” in an effort to temper investor enthusiasm. Nonetheless, Zegona’s shares have surged 175% in 2025 alone, boosted by speculation about consolidation and Telefónica’s strategic positioning.
The British investment group now commands a market capitalization of £8.8 billion, up 220% from a year ago. Market rumors about Telefónica preparing a capital increase fueled further gains last week, which investors interpreted as a step toward financing the acquisition. The sharp rise in Zegona’s valuation, however, poses a significant obstacle to closing a deal at a price Telefónica’s shareholders would find acceptable.
Alternatives Under Consideration
Despite the challenges, sources within Telefónica emphasize that the Vodafone Spain deal remains Murtra’s top priority—unless the European Commission were to impose remedies that excessively strengthen Digi, the low-cost competitor. Murtra has even discussed the opportunity with his predecessor, José María Álvarez-Pallete, who reportedly encouraged him to pursue it.
Should the acquisition prove unfeasible due to pricing or regulatory remedies, Telefónica is also evaluating alternatives in other European markets, particularly the United Kingdom and Germany. Reports from Goldman Sachs suggest that 1&1, a German operator, is among the potential targets under review.
