Vodafone to keep Spain's Ono as separate company for tax reasons

Vodafone branding is seen outside a retail store in London November 12, 2013. REUTERS/Toby Melville/File Photo

MADRID (Reuters) - British telecoms operator Vodafone will keep Spain’s Ono as a separate company for tax reasons, a spokesman for the group said on Monday, after its 7.2 billion-euro ($8.1 billion) acquisition of the cable operator was sealed in 2014.

Spain’s Supreme Court recently ruled a tax imposed by Madrid’s city council on telecoms companies for their use of land was legal, potentially opening the door to more taxes of this kind.

Vodafone will not fully merge its Spanish business with Ono as a result, although it will keep control of the company.

“Following a recent ruling, the tax burden the integrated company would have to contend with would be a lot higher than if the two companies remained separate,” the spokesman said.

The spokesman added that the new structure of the deal would have no impact on the group’s close to 18 million clients in Spain as of the end of last year.

Reporting by Robert Hetz and Andres Gonzalez, Writing by Sarah White, Editing by Paul Day