Shareholder Return of €4B Confirmed as Vodafone Sells Italian & Spanish BusinessesVodafone Divests Italian Unit to Swisscom for €8B in Restructuring Move

Vodafone, a leading telecommunications company based in the United Kingdom, revealed on Friday that it has reached an agreement to divest its Italian division to Swisscom for a staggering eight billion euros ($8.7 billion). This move is a significant step in the company's efforts to restructure its European operations, which have included streamlining its workforce and offloading various assets abroad.

In addition to the sale of its Italian unit, Vodafone also announced its intention to return four billion euros to shareholders following the successful divestment of both its Italian and Spanish businesses, which have a combined value of 12 billion euros. This decision was confirmed by Vodafone CEO Margherita Della Valle, who stated that the sale to Swisscom marks the "final stage in the transformation of our European operations."

Della Valle also expressed her confidence in the future growth of Vodafone, as the company's remaining businesses will now be focused on operating in rapidly expanding telecommunication markets where they hold strong positions. This, she believes, will lead to more stable and robust growth for the company in Europe. Swisscom CEO Christoph Aeschlimann supported this sentiment, stating that the merger of Vodafone Italia with his company's Italian subsidiary, Fastweb, is a strategic move with significant potential for all stakeholders involved.

Vodafone and Swisscom had previously announced their plans for the transaction last month, after Vodafone had rejected multiple offers from French billionaire Xavier Niel's Iliad group to merge their Italian businesses. The latest proposal from Iliad valued Vodafone Italia at 10.45 billion euros, which was ultimately rejected in favor of the deal with Swisscom. In February 2022, Vodafone had also turned down an 11.25-billion-euro bid from Iliad and private equity group Apax Partners. Niel has since acquired a 2.5% stake in Vodafone.

According to a source close to the matter, Vodafone's decision to go with Swisscom was influenced by several factors, including the "substantial cash element" of the deal and a higher level of certainty that the transaction would be approved by Italian regulators. In addition to the sale of its Italian division, Vodafone also completed the sale of its Hungarian unit last year and announced the divestment of its Spanish division to investment fund Zegona for up to five billion euros.

The company has also faced challenges in its home market, as the British competition regulator is currently investigating Vodafone's proposed merger of its British mobile phone operations with those of Three UK, owned by Hong Kong-based CK Hutchison. Despite these obstacles, Vodafone remains committed to its efforts to streamline and optimize its operations, as evidenced by the successful sale of its Italian unit to Swisscom.

Alton Shaffer
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