Yahoo Finance Vodafone in talks to sell Italian arm to rival for £6.8bn
Vodafone has entered exclusive talks to sell its Italian business to Swisscom, weeks after rejecting an approach by French billionaire Xavier Niel.
Any deal to offload the business could raise €8bn (£6.8bn) in funds for the UK telecoms giant, as it battles to slim down its global operations.
In a statement on Tuesday, the company said: “Vodafone has engaged extensively with several parties to explore market consolidation in Italy and believes this potential transaction delivers the best combination of value creation, upfront cash proceeds and transaction certainty for Vodafone shareholders.”
It cautioned that the deal was subject to binding documents and there was no certainty it would ultimately be agreed.
Shares rose almost 4pc in early trading.
It comes after Vodafone last month rebuffed a bid from Iliad Group, the empire controlled by telecoms tycoon Xavier Niel.
That offer would have valued the Italian business at €10.5bn but it consisted of only €6.6bn of cash upfront. Vodafone would have retained half the share capital of the combined entity.
The proposed deal with Swisscom is less likely to attract scrutiny from competition regulators than a tie-up with Iliad, which operates in France and Poland.
Swisscom, which is majority-owned by the Swiss government, is the largest telecoms company in Switzerland.
It already operates in Italy through the mobile and broadband firm Fastweb.
Karen Egan at Enders Analysis described the sale as a “bold move” that would leave Vodafone’s European operations dominated by the UK and Germany.
She added: “I’m somewhat surprised that they’re leaving Italy altogether given their history there but it’s the right move.”
It marks the latest deal pursued by Vodafone boss Margherita Della Valle as she looks to trim the sprawling telecoms giant and return it to growth.
The company has recently agreed a £15bn deal to merge with Three in the UK, creating the country’s largest mobile network.
However, that deal is under review by the Competition and Markets Authority over concerns it could push up prices for consumers.
It is also being examined on national security grounds amid fears that Three’s Chinese owner CK Hutchison could gain access to sensitive national infrastructure.
Vodafone has also agreed to sell its Spanish operations to Zegona, an investment vehicle led by former Virgin Media executives, for €5bn.
Ms Della Valle this week called for regulators to loosen rules around telecoms mergers in Europe, insisting it was “not economical” to run multiple 5G networks in the same country.
