Source: AFP
British telecoms giant Vodafone said on Friday it had agreed to sell its Italian unit to Swisscom for eight billion euros ($8.7 billion), completing efforts to overhaul the British group’s operations in Europe.
Vodafone, which has previously rejected bids from French billionaire Xavier Niel’s Iliad Group, has been on a cost-cutting campaign that has included layoffs and offloading divisions overseas.
The British group said it plans to return four billion euros to shareholders following the sale of its Italian and Spanish businesses, which total 12 billion euros.
Vodafone chief executive Margherita Della Valle said the deal with Swisscom marked the “third and final step in the reshaping of our European operations”.
“Going forward, our businesses will operate in growing telecom (telephone) markets — where we hold strong positions — enabling us to deliver predictable, stronger growth in Europe,” she said in a statement.
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Swisscom said in a separate statement that it will merge Vodafone Italia with its own Italian subsidiary, Fastweb.
“The industrial logic of this merger is very strong,” said Swisscom CEO Christoph Aeschlimann. “Fastweb and Vodafone Italia are ideal for creating high added value for all stakeholders”.
Vodafone and Swisscom had announced last month that they were in advanced talks about the transaction.
Rejection of Niel
Earlier this year, Vodafone rejected Iliad’s proposal to merge its Italian operations in a deal valuing Vodafone Italy at 10.45 billion euros.
The UK mobile operator had already rejected an €11.25 billion approach from Iliad and private equity group Apax Partners in February 2022.
Niel has since acquired a 2.5 percent stake in Vodafone.
A source close to the matter told AFP last month that Vodafone preferred a deal with the Swiss group because of the “significant cash element” and a higher degree of certainty that the deal could be completed as it would have a better chance of being approved. by the Italian regulatory authorities.
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Della Valle has announced the sale of its Spanish division to investment fund Zegona for up to five billion euros.
It followed its decision last year to cut 11,000 jobs, or more than 10% of Vodafone’s global workforce.
Britain’s competition regulator, meanwhile, is investigating Vodafone’s plan to merge its UK mobile operations with those of Three UK, owned by Hong Kong-based CK Hutchison.
Vodafone also completed the sale of its Hungarian unit last year.
Source: AFP