Spanish telco Telefónica is considering putting in a takeover bid for Vodafone Spain.

As reported by Spanish newspaper El Confidencial earlier this week, Telefónica CEO Marc Murtra sees a takeover as a key part of the carrier’s new strategic plan, which aims to focus heavily on Europe.

Vodafone Spain was acquired by UK investment firm Zegona last year for €5 billion ($5.84bn).

El Confidencial reports that Murtra has already been given the go-ahead to pursue the deal from the company’s shareholders, which consists of the State Industrial Participation Company (SEPI), CriteriaCaixa , and the Saudi group STC.

He’s also reportedly met with government officials, informing them of Telefónica’s intentions to buy Vodafone Spain.

However, such a deal would require regulatory approval both in Spain and from the European Union, as it would further consolidate the Spanish telco market.

At present, the market is made up of Telefónica, Vodafone, MasOrange, and Digi. Digi operates as an MVNO but has plans to build its own network after acquiring frequencies in the 1,800MHz, 2,100MHz, and 3,500MHz bands from MásMóvil last year, which allowed MásMóvil and Orange to complete their merger.

Europe focus

Since taking over at Telefónica this year, Murtra has made the company’s priority focus on Europe, while also pushing hard for market consolidation.

Telefónica operates in its home market, Spain, and commands a sizeable chunk of the telecoms market in the UK with Virgin Media O2, and in Germany with O2 Deutschland.

In April, he suggested the carrier’s strategy will center around five principles when it’s announced later this year after the company completes its strategic review.

The five principles are changes in Europe, ensuring customers are the center of everything, technology and operational excellence as the pillars of Telefónica’s business, the company acting with disciplined industrial logic, and the creation of value for customers, employees, and shareholders.

The carrier has been busy this year shifting units in markets it’s pushing to leave, such as Latin America.

Earlier this year, the carrier sold its Colombian unit for $400m to Millicom. Just last month, Telefónica also confirmed plans to sell its Ecuadorian unit to Millicom Spain for $380m.

Telefónica sold its Peruvian unit for less than $1m to Integra TecInternational Inc (Integra Tec), taking a huge hit on the $2 billion the company spent to acquire the company back in 1994. In April, Spanish publication El Confidencial reported that Telefónica has hired Citi as an adviser to sell its Chilean business unit.

In February, Telefónica struck a deal to sell its Argentinian unit to Telecom Argentina for $1.2bn.

Last month, the company entered exclusive talks with Beyond ONE, the owner of Virgin Mobile Mexico, over the sale of its Mexican unit.

Despite all the sales in LATAM, the carrier does intend to keep its Brazilian unit.