Vodafone Sells Italian Operations To Swisscom For $8.7 Billion, Exiting Italian Market
Swisscom CEO Christoph Aeschlimann emphasized the deal's strategic alignment with the company's long-term goals and its successful track record in Italy over 17 years.
Swisscom announced on Friday its acquisition of Vodafone Italia for 8 billion euros ($8.7 billion), merging it with its Italian subsidiary Fastweb. This move mirrors recent consolidation trends in Europe's fiercely competitive telecoms industry, exemplified by Orange's merger with MasMovil in Spain and Vodafone's prior sale of its Spanish unit to Zegona Communications.
The deal, to be financed through debt and cash, underscores Swisscom's strategic shift, aiming to bolster its position in Italy's telecom market. Vodafone plans to return 4 billion euros to shareholders and reduce dividends following the transaction and the earlier Spanish sale.
We have today announced the final step of the portfolio right-sizing announced in May 2023, with a binding agreement to sell 100% of Vodafone Italy to Swisscom AG. Read the press release below. — Vodafone Group (@VodafoneGroup) March 15, 2024
Market reactions were positive, with Vodafone shares rising by 3.2% in London and Swisscom gaining 1.8% in Zurich. The merged entity will become Italy's second-largest fixed-line broadband provider after TIM, with significant presence in the business and mobile sectors.
Swisscom CEO Christoph Aeschlimann emphasized the deal's strategic alignment with the company's long-term goals and its successful track record in Italy over 17 years. He hinted at possible future deals but stressed the immediate focus on integrating Vodafone Italia.
Swisscom's move received support from the Swiss government, which holds a 51% stake. Bern indicated a review of its ownership strategy for Swisscom throughout 2024, potentially including privatization options.
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The acquisition aims for annual savings of 600 million euros, largely through transitioning Fastweb's mobile customers to Vodafone's network. The deal is set to close in the first quarter of 2025 without requiring a shareholder vote.
Vodafone's CEO, Margherita Della Valle, sees the Italian deal as the final step in reshaping the company's European portfolio following previous strategic moves in Spain and the UK.
Overall, the acquisition marks a significant shift in the European telecom landscape, highlighting the ongoing consolidation efforts among major players to optimize operations and strengthen market positions.
