Vodafone’s Italian operations sold to Swisscom for £6.8bn

Vodafone Italy has been sold in full to Swisscom AG as the Berkshire-based telecoms giant looks to reshape its European footprint.

The £6.83 billion deal is expected to deliver a £3.42 billion capital return for Vodafone via share buybacks, while dividends will be halved to 4.5 cents a share from next year.

Vodafone and Swisscom will also look to develop a closer commercial relationship as they explore potential collaboration in IoT, enterprise services and solutions, procurement, operational shared services and roaming, both within and beyond Italy.

With the sale of Vodafone Spain announced last October and a mega-merger with Three UK in the works, the company is slimming down its operations on the continent to focus on growing markets.

Read the March 2024 issue of The Business Magazine, including our feature on skills

Group chief executive Margherita Della Valle said: “Today, I’m 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.

“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 [£10.25 billion] of upfront cash proceeds and we intend to return [£3.42 billion] to shareholders via buybacks, as part of our broader capital allocation review.”

Check out this acquisition alongside other deals across the region on our Deal Ticket

Along with the European shakeup comes renewed focus on the B2B market, where Vodafone’s revenues grew 5 per cent in Q3 FY23.

The company sees its biggest growth opportunity in providing Cloud transition and generative AI services to SMEs and public sector customers, and will look to forge new partnerships with the likes of Microsoft.

Internally, Vodafone plans to move the majority of its central operations to a fully commercial model from 1st April 2024.

That date will also mark a reorganisation of the company into five business divisions – Germany, European Markets, Africa, Vodafone Business, and Vodafone Investments.

Read more - Vodafone confirms sale of Spanish arm to Zegona Communications