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

Published by

Daniel Face

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.

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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.

Daniel Face

Born and raised in Berkshire, Dan fell into journalism after completing his bachelor’s degree in English at UCL. Writing for The Business Magazine and local Biz News sites has given him the opportunity to chat with all manner of small business owners and share their success stories with a wider audience. Outside of work, Dan enjoys live music, board games and quiz shows, and is making a slow but persistent effort to learn Spanish.