MADRID (Reuters) - French telecom group Orange (ORAN.PA) said on Friday it would take Spanish rival Jazztel JAZ.MC private after its $3.8 billion takeover was overwhelmingly backed by Jazztel shareholders.
Shares in Jazztel will stop trading after Aug. 13, Orange said. It has said that it plans to merge its Spanish unit and Jazztel and then list part of the merged company on the Madrid stock exchange.
With the purchase Orange will expand its presence in Spain several times over to reach 10 million households with its fiber optic network by 2016.
It said 95 percent of Jazztel shareholders had supported its offer of 13 euros per share, which was a 34 percent premium to Jazztel’s average share price in the month before Orange made the offer last September.
The remaining 5 percent will now be forced to support the deal under a separate compulsory offer to be launched by Orange at the same price.
The French company hopes the deal will help it better compete with Vodafone (VOD.L) in the Spanish market after Vodafone acquired cable operator Ono last year.
Acquisitions are picking up pace in the European telecoms sector as operators seek to cut costs and increase market share at the same time, but EU Competition Commissioner Margrethe Vestager warned this month that mergers could result in higher bills for consumers and less innovative companies.
Editing by Susan Fenton