Vodafone Group has agreed to sell its Italian business to Swisscom for EUR 8 billion, in what CEO, Margherita Della Valle, described as the third and final step toward reshaping its European operations.
Della Valle has made significant moves to simplify Vodafone's business in Europe, and the proposed exit in Italy comes after an agreement to sell its operations in Spain to Zegona Communications for up to EUR 5 billion.
It is also undergoing a rigorous regulatory process to complete the merger of its UK operations with CK Hutchison-owned, Three UK. Last month, Vodafone Italy entered into exclusive talks with Swisscom regarding a sale in Italy, with the EUR 8 billion sum paid upfront in cash.
As part of the agreement, Vodafone will also provide certain services to Swisscom for up to five years, totaling approximately EUR 350 million in the first year after the transaction is completed.
If the Spanish and Italian deals are approved, Vodafone has stated that it will return EUR 4 billion to shareholders through share buybacks, with EUR 2 billion coming from each sale.
Della Valle said its business “will be operating in growing telco markets, where we hold strong positions, enabling us to deliver predictable, stronger growth in Europe.”
Vodafone announced that it will begin an organizational restructuring on April 1st and operate across five business divisions: Germany, European Markets, Africa, Vodafone Business, and Vodafone Investments. Vodafone has made a number of adjustments to reflect the revision.
Ahmed Essam, most recently CEO of Vodafone’s UK business, has been named Executive Chair of Vodafone Germany and CEO of European Markets. Max Taylor, the current CCO, will take over as UK CEO.
Meanwhile, Philippe Rogge, CEO of Vodafone Germany, stepped down and will leave the company, being replaced by Marcel de Groot.
Finally, Serpil Timuray, the most recent CEO of its other Europe division, was named CEO of Vodafone Investments.
