Vodafone completes £6.6bn deal to offload Italian arm
The mobile phone giant last month saw its £15 billion mega-merger with Three UK given the green light by Britain’s competition regulator.
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Your support makes all the difference.Vodafone has completed the eight billion euro (£6.6 billion) sale of its Italian business to Switzerland’s Swisscom as a flurry of deals are sewn up for the start of the new year.
The mobile phone giant – which last month saw its £15 billion tie-up with Three UK cleared by Britain’s competition regulator – plans to use the cash to pay down its debt pile and complete a further two billion euro (£1.7 billion) share buyback to boost returns for investors once its current programme has ended.
Vodafone agreed the deal with Swisscom in March just two weeks after the pair confirmed talks, with Vodafone saying the move marked the final step of its strategy to sell off parts of its European portfolio.
As part of the deal, the firms have agreed that Vodafone will continue to provide certain services to Vodafone Italy for up to five years, which will see the FTSE 100 listed group receive an annual charge of around 350 million euro (£290 million).
Vodafone has been looking to free up cash and improve its financial performance by selling off parts of the business, including its Spanish arm, having previously struck deals to sell its Hungarian and Ghanaian divisions.
The Italian division sale comes after the Competition and Markets Authority (CMA) last month gave the green light to the mega-merger between Vodafone and Three UK, paving the way for the creation of Britain’s biggest mobile phone network.
The CMA had been probing the deal amid concerns it could substantially reduce options for mobile customers.
It said the landmark deal can go ahead if both companies agree to invest billions to roll out a combined 5G network across the UK, while the firms were told to offer shorter-term customer protections requiring the merged company to cap certain mobile tariffs for three years.
Vodafone is now hoping to complete the deal in the first half of this year.
The completion of the Italian business sale also comes amid a raft of other deals completing at the start of the new year.
Coventry Building Society finalised its £780 million takeover of the Co-operative Bank on January 1.
The tie-up, announced in May, creates a banking giant with millions of customers and about £89 billion worth of assets.
John Wood Group also completed the sale of its stake in rotating equipment business Ethos Energy for 138 million US dollars (£114 million).