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Vodafone has agreed to sell its Italian operations to Swisscom for €8bn in cash as part of chief executive Margherita Della Valle’s plans to simplify the UK-based telecoms group.
The company also said it would return up to €4bn to shareholders through buybacks and cut its dividend to 4.5 cents a share from next year, down from 9 cents in 2024.
Della Valle said the sale marked “the third and final step in the reshaping of our European operations” following the disposal of its Spanish unit and a merger of its UK operations currently being reviewed by Britain’s competition regulator.
In October the FTSE 100 company agreed to sell its Spanish operations for up to €5bn to Zegona Communications, which was founded by two former Virgin Media executives.
The €4bn in share buybacks consists of up to €2bn following completion of the sale of Vodafone Spain in 2025 and up to €2bn from the sale of Vodafone Italy, which is subject to regulatory and other approvals.
Vodafone said the deal provided the UK telecoms group with a full exit from Italy, where it was “not possible” to achieve adequate returns on capital employed.
“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 Della Valle.
The company said its biggest growth opportunity was in business-to-business and that demand for digital services was “strong”.
As part of the Italy deal, Vodafone will continue to provide certain services to Swisscom for up to five years. The annual charge paid by Swisscom for the first year after completion was estimated to be €350mn, which Swisscom said was expected to decrease over time.
Swisscom said it intended to merge Vodafone Italy with Fastweb, its subsidiary in Italy, which would “bring together complementary high-quality mobile and fixed infrastructures, competencies, and capabilities to create a leading converged challenger in a market with material growth opportunities”.
Vodafone plans to restructure its organisation into five business divisions: Germany, European markets, Africa, Vodafone Business and Vodafone Investments, with Philippe Rogge stepping down as chief executive of Vodafone Germany and leaving the group.
The announcement comes as the UK competition regulator in January launched a formal investigation into the proposed merger of Vodafone’s domestic business with CK Hutchison’s Three UK, which is expected to create Britain’s largest mobile operator.
The deadline for the probe is next Friday, after which the Competition and Markets Authority could refer the merger for a more in-depth investigation.
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