Vodafone
Group
(VOD)
has
agreed
to
sell
its
Italian
business
to
Swisscom
(SCMN)
for
€8
billion
(€6.8
billion)
and
will
return
half
of
the
proceeds
to
shareholders.
The
Newbury-headquartered
telecommunications
provider
had
confirmed
in
late
February
that
it
was
in
exclusive
talks
with
its
Bern-based
peer
to
sell
its
Italy
operations.
It
had
previously
turned
down
a
merger
proposal
for
the
division
from
France’s
Iliad
SA
(ILD).
The
company
now
says
it
will
receive
€8
billion
in
cash
up-front
from
Swisscom.
It
will
return
half
of
this
to
shareholders
as
a
share
buyback
in
the
new
financial
year.
At
the
time
of
writing,
shares
in
the
company
are
up
4%
on
the
news,
to
68p.
However,
Vodafone
said
it
will
rebase
its
annual
dividend
to
4.5
euro
cents
per
share
from
the
financial
year
2025
onward,
reducing
it
from
the
9
euro
cents
currently
on
offer.
Vodafone’s
financial
year
ends
on
March
31.
It
paid
a
4.50
euro
cents
interim
dividend
for
the
current
year
and
confirmed
on
Friday
that
the
full-year
payout
for
financial
2024
will
stay
at
9.00
cents.
Vodafone
noted
the
Italian
sale
follows
a
similar
disposal
of
its
Spanish
arm,
raising
€12
billion
in
total.
“Today,
I
am
announcing
the
third
and
final
step
in
the
reshaping
of
our
European
operations,”
chief
executive
Margherita
Della
Valle
said.
“Going
forward,
our
businesses
will
be
operating
in
growing
telco
markets –
where
we
hold
strong
positions –
enabling
us
to
deliver
predictable,
stronger
growth
in
Europe.
“This
will
be
coupled
with
our
acceleration
in
B2B,
as
we
continue
to
take
share
in
an
expanding
digital
services
market.”
Swisscom
said
the
acquisition
will
be
fully
debt-financed.
It
will
combine
Vodafone
Italia
with
its
own
Italian
subsidiary,
Fastweb,
which
it
had
acquired
in
2007.
It
expects
to
be
able
to
achieve
€600
million
in
annual
run-rate
cost
savings
from
the
combination
of
the
two.
“The
industrial
logic
of
this
merger
is
very
strong,”
said
Swisscom
CEO
Christoph
Aeschlimann.
“Fastweb
and
Vodafone
Italia
are
an
ideal
fit
to
create
high
added
value
for
all
stakeholders.”
By
Tom
Waite,
Alliance
News
editor
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