Swisscom to Buy Vodafone's Italy Unit for $8.7 Billion — Update
By Adria Calatayud
Swisscom said it agreed to buy Vodafone Group's Italian business for 8 billion euros ($8.71 billion), a deal that completes the U.K. telecom company's simplification of its European portfolio.
The Swiss telecommunications group said Friday that the price will be paid fully in cash and is on a debt- and cash-free basis. Swisscom plans to merge Vodafone Italia with its Fastweb subsidiary in the country, reshaping one of Europe's largest telecoms markets.
The agreement between Swisscom and Vodafone comes after the companies disclosed in late February that they were in advanced talks, and after the U.K. group turned down a bid for the unit from French billionaire Xavier Niel's Iliad Group in late January.
Swisscom said the deal combines its strength in fixed connectivity with Vodafone Italia's mobile operations, creating a so-called converged operator--a telecom provider that offers an integrated blend of services. The company said this will allow it to tap into the material growth opportunities it sees in Italy.
For Vodafone, the Italy sale is the last step in a restructuring of its European portfolio launched in May under Chief Executive Margherita Della Valle. Last year, the company struck a deal to sell its Spanish business to Zegona Communications and agreed to merge its U.K. operations with CK Hutchison Holdings' Three.
"Our transactions in Italy and Spain will deliver EUR12 billion of upfront cash proceeds and we intend to return EUR4 billion to shareholders via buybacks, as part of our broader capital allocation review," Della Valle said.
Write to Adria Calatayud at adria.calatayud@wsj.com
(END) Dow Jones Newswires
March 15, 2024 03:34 ET (07:34 GMT)
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