Vodafone yesterday confirmed it is in talks with Greek rival Wind Hellas over a potential merger of operations in the country.
The Greek telecoms industry has been pummelled by the country’s economic woes, with Vodafone’s service revenue slumping by almost a fifth last year.
Wind Hellas and Vodafone both command around 4m subscribers and a combined entity would still lag behind market leader Cosmote Mobile, which is controlled by Deutsche Telekom through its 40 per cent stake in OTE Group.
Vodafone said discussions are at an early stage.
Wind Hellas, formerly owned by Egyptian tycoon Naguib Sawiris, fell under the control of its bondholders in December after wiping out almost €2bn (£1.8bn) of its debt.
Vodafone would achieve substantial savings through the tie-up as well as competing more with Cosmote. The deal is likely to involve a complete merger of the two operations rather than a strategic partnership.
ADVISERS: BANK OF AMERICA MERRILL LYNCH
TELECOMS, MEDIA AND TECHNOLOGY TEAM
CITY A.M. understands Bank of America Merrill Lynch is advising Vodafone on the possible merger of its Greek business with Wind Hellas, although a spokeswoman for the bank declined to confirm its participation. It is one of a number of investment banks used by Vodafone.
The TMT team at Bank of America has worked on some of the biggest deals around this year.
Bankers from the team were hired to line up asset buyers in order to smooth over AT&T’s $39bn (£24bn) bid for T-Mobile USA. The two sides are desperate to avoid regulatory hurdles and hope the bank can help them to seal the deal. The sale of assets including customers and wireless spectrum could be worth more than $8bn.
The bank is also advising Autonomy on Hewlett Packard’s $10bn bid for the firm, alongside Qatalyst, Citigroup, Goldman, JP Morgan Chase and UBS.
Analysts say the bid, which offered a giant premium to the pre-bid price, is almost certain to close.