Zegona did not purchase Vodafone Spain like someone buying an operator to manage for decades. They bought it with a very specific financial thesis: to enter a depressed asset, reorganize it, extract value from its infrastructure, and keep an exit open with a much higher valuation. Two years after completing the deal, this logic is starting to clearly show in the Spanish telecom market.
The British firm paid €5 billion for Vodafone Spain in a transaction closed on May 31, 2024. Vodafone Group received €4.1 billion in cash and another €900 million in redeemable preferred shares, while Zegona took control of 100% of the Spanish business. The financing combined debt, seller financing, and a planned capital increase of up to €600 million—a structure that explains why the deal has become a case study on leverage applied in the telecom sector.
The buy-fix-sell model applied to a major Spanish telecom
Founded in 2015, Zegona’s goal is to invest in European companies in telecommunications, media, and technology to improve performance and generate attractive returns for its shareholders. The company describes its approach as a “Buy-Fix-Sell” strategy — buying, transforming, and selling once the asset reaches a more favorable valuation.
Vodafone Spain fit nearly perfectly into this thesis. It was the third-largest operator in Spain, maintained a well-known brand, had significant network assets, and was coming out of years of commercial pressure, customer losses, and financial deterioration. For Vodafone Group, the sale was part of a broader simplification of its European presence. For Zegona, it was an opportunity to buy a large, complex asset at a low price with room for improvement.
The initial adjustment was tough. Soon after taking control, Vodafone Spain proposed a collective dismissal plan (ERE), initially affecting about 1,200 jobs. The final agreement approved by employees reduced this to 898 employees, about 27% of the staff, with support measures such as redeployment plans and temporary health insurance for those affected.
The second move was more financial than operational: separating and monetizing infrastructure assets. Zegona advanced fiber agreements with MasOrange, GIC, Telefónica, and AXA — operations that generated significant income and lightened the balance sheet. In November 2025, the company announced that AXA’s investment in FiberPass, combined with GIC’s entry into PremiumFiber, would bring €1.8 billion of initial revenue to Vodafone Spain.
| Milestone | Approximate Impact |
|---|---|
| Purchase of Vodafone Spain | €5,000 million |
| Cash payment to Vodafone Group | €4,100 million |
| Redeemable preferred shares to Vodafone Group | €900 million |
| Planned capital increase by Zegona | Up to €600 million |
| Initial fiber operation revenues | €1.8 billion |
| Final ERE agreed | 898 workers |
Fiber as the central piece of value creation
The transformation of Vodafone Spain cannot be understood solely as a cost-cutting exercise. The key lies in how Zegona has handled infrastructure: not as an indivisible block within an integrated operator, but as an asset capable of generating liquidity, reducing debt, and improving market perception.
Operations with fiber assets follow an increasingly common logic in Europe. Operators separate parts of their fiber networks, group them into specialized vehicles, and involve infrastructure funds or institutional investors. In exchange, they receive cash, maintain wholesale access to the network, and reduce the need to duplicate investments in areas with excess infrastructure.
In Spain, the MasOrange and GIC operations led to the creation of PremiumFiber, while FiberPass consolidates assets from Telefónica and Vodafone Spain. After AXA’s entry, the planned structure of FiberPass is composed of Telefónica (55%), AXA (40%), and Vodafone Spain (5%). Vodafone thus reduces its stake but retains access to a nationwide fiber network under more favorable economic terms.
These kinds of moves help explain why Zegona has been able to change the narrative about Vodafone Spain so quickly. The company hasn’t needed to suddenly make it the strongest operator in the country. Stabilizing revenues, improving profitability, organizing the network structure, and demonstrating that the asset could generate cash and reduce dependencies have been enough.
Operational data have also reflected this. In its third fiscal quarter of 2025, Vodafone Spain reported a 1.1% revenue increase, reaching €923 million—its first growth since Zegona’s acquisition, according to Cinco Días. The operator also recorded five consecutive quarters of positive net customer gains and improved profitability, with an operating cash flow margin higher than the previous year.
Telefónica, consolidation, and a valuation difficult to digest
The real debate begins now. Zegona has valued Vodafone Spain at around €14.7 billion, nearly tripling the €5 billion paid in 2024. This valuation, based on documentation sent to the London Stock Exchange and reported by Spanish financial publications, has increased tension around any potential corporate negotiations.
Telefónica appears as the most obvious buyer from an industry standpoint, but not due to regulatory ease or price. The Spanish operator has reportedly made approaches to explore a possible acquisition, with an internal valuation near €8 billion—significantly lower than Zegona’s valuation.
The difference is substantial. If the enterprise value were around €8 billion, deducting net debt of close to €3 billion would leave a shareholder value for Zegona significantly above its initial capital investment. Even if the valuation were to fall to €15 billion, the financial thesis could be strongly reinforced.
However, Telefónica cannot evaluate the deal solely based on customer numbers. Buying Vodafone Spain would enable gaining scale in a highly competitive market, but it would also entail taking on debt, technological integration, wholesale commitments, and intense regulatory scrutiny. The CNMC (Spanish regulator) and Brussels would play significant roles in a deal that could once again shift the balance of the Spanish market after the MasOrange creation.
Time is also a factor. Zegona can wait if the business continues to improve and if the market recognizes this in the stock price. Telefónica may also wait if it considers the price too high or if regulators would require too many concessions. Meanwhile, Digi continues growing, MasOrange consolidates its position, and the Spanish market keeps pressuring prices.
The deal encapsulates a fundamental tension in European telecommunications. Networks demand massive investments, yet revenues aren’t increasing at the same pace. Operators seek consolidation to gain scale; regulators monitor to prevent reduced competition; and specialized funds find opportunities in assets penalized by market dynamics. Zegona has understood this tension and turned it into a strategic approach.
What happened with Vodafone Spain isn’t just luck. It’s a financial operation designed to capture value in a sector where many traditional operators remain caught between debt, competition, and investment demands. The question isn’t just who will buy Vodafone Spain, but how much a telco is truly worth when its assets are separated, costs cut, and its story rewritten for sale.
Frequent questions
How much did Zegona pay for Vodafone Spain?
Zegona finalized the purchase of Vodafone Spain for €5 billion on May 31, 2024.
What does Zegona’s buy-fix-sell strategy mean?
It involves acquiring undervalued assets, improving their operational and financial performance, and selling or monetizing them once the market recognizes more value.
Why is a valuation of €15 billion discussed?
Because Zegona has estimated Vodafone Spain’s value around €14.7 billion based on market-related documentation, according to Spanish financial publications.
Can Telefónica buy Vodafone Spain?
It could make industrial sense, but regulatory, debt, and integration considerations complicate such a large deal.
via: LinkedIn