Vodafone has entered into an agreement to sell its Italian business to Swisscom for €8 billion and announced an organisational shake up of the wider company.

Andrew Wooden

March 15, 2024

3 Min Read

The intention is that Vodafone Italy will merge with Swisscom-owned Italian broadband operator Fastweb. The €8 billion figure represents a multiple of around 26x Vodafone Italy's predicted operating free cash flow for the current financial year and 7.6x adjusted EBITDAaL.

in December last year another suitor, Iliad, tabled an offer for Vodafone Italia, having had a previous full takeover bid rejected almost two years earlier. Its 50:50 joint venture plan valued Vodafone Italia at an EV of €10.45 billion and would have seen Vodafone receive €6.5 billion in cash plus a €2 billion shareholder loan – but the deal was ultimately rejected.

The Swisscom transaction is conditional on certain regulatory approvals, including clearance by the Italian Competition Authority.

This follows the sale ofVodafone's Spanish business to UK-based investment firm Zegona Communications in October last year for €5 billion. Both transactions are pitched as part of a wider rejigging of its European footprint.

“Today, I am announcing the third and final step in the reshaping of our European operations. 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,” said Margherita Della Valle, Vodafone Group Chief Executive. “This will be coupled with our acceleration in B2B, as we continue to take share in an expanding digital services market.

“The sale of Vodafone Italy to Swisscom creates significant value for Vodafone and ensures the business maintains its leading position in Italy, which has been built through the dedicated commitment of our colleagues to serving our customers over many years.

Our transactions in Italy and Spain will deliver €12 billion of upfront cash proceeds and we intend to return €4 billion to shareholders via buybacks, as part of our broader capital allocation review.”

The firm will now be organised into five business divisions: Germany; European Markets; Africa; Vodafone Business; and Vodafone Investments.

Its executive structure will also see changes, with Philippe Rogge stepping down from his position as CEO Vodafone Germany and leaving the firm. Ahmed Essam has been made Executive Chairman Vodafone Germany and CEO European Markets, with responsibility for the UK, Albania, Czech Republic, Greece, Ireland, Portugal, Romania and Turkey.

Serpil Timuray will be CEO of Vodafone Investments, covering Vantage Towers, Vodafone Ziggo, Vodafone Idea and TPG Telecom.

Elsewhere, Marcel de Groot has been appointed as the new CEO of Vodafone Germany, and Max Taylor as CEO Vodafone UK, both reporting to Essam.

Of the latter appointment, Kester Mann, Analyst at CCS Insight told Telecoms.com: “Max Taylor will take on one of the biggest roles in UK telecoms at a time of huge significance as Vodafone seeks regulatory clearance for its blockbuster merger with Three. Should the deal be approved, Mr Taylor will head up the UK’s largest mobile provider with a combined 28 million customers – a position of huge influence.

“The appointment is recognition of Mr Taylor’s strong commercial and marketing expertise. If he is to eventually lead a combined Vodafone and Three, he will need to lean on all his experience to bring the two brands together, develop new commercial propositions and bring fresh competition to BT."

Della Valle presented a turnaround plan for the company in May last year, saying ‘Our performance has not been good enough. To consistently deliver, Vodafone must change.’

Shedding regional business that weren’t performing financially was clearly part of that change, and another key element in Vodafone’s future trajectory will be the proposed merger in the UK with Three, which is still awaiting regulatory approval.

About the Author(s)

Andrew Wooden

Andrew joins Telecoms.com on the back of an extensive career in tech journalism and content strategy.

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