HomeBussinessVodafone confirms exclusive discussions with Swisscom for sale of Italian unit

Vodafone confirms exclusive discussions with Swisscom for sale of Italian unit


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Swisscom are said to be paying cash for the operator, and subject to confirming a binding transaction will acquire the business for an enterprise value of €8 billion on a debt and cash free basis.

The enterprise value represents a multiple of over 7.6x consensus FY24F Adjusted EBITDAaL, for the 12 month period ending 31 March 2024.

Vodafone said it has engaged with several parties to explore market consolidation in Italy, but believes a transaction with Swisscom offers the best combination of value creation, upfront cash proceeds and transaction certainty for Vodafone shareholders.

Group CEO Margherita Della Valle, has prioritised slimming down, refocusing and reducing debt at Vodafone since taking charge in April 2023.

The Italy news comes as a sale has already been agreed for Vodafone’s Spanish business, to UK investment vehicle Zegona.

It is also in the process of merging its UK business with Three, pending Competition and Market authority approval.

Italy is Vodafone’s third largest market after Germany and the UK, accounting for 11% of its service revenue as of its latest quarterly results.

The country is home to four mobile networks with Iliad, TIM (Telecom Italia), and Wind Tre (CK Hutchinson) operating alongside Vodafone.

The EU has recently relaxed its opinions on consolidation that changes a market from four to three operators. For a number of years it has been critical of the competition impact on consumers, but has softened as the industry has called for consolidation to aid investment in networks.

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