The mobile phone giant will offload Vodafone Italia in an effort to streamline operations and tackle sliding share prices.
ADVERTISEMENTVodafone has agreed to sell its Italian business to Bern-based telecommunications firm Swisscom for €8 billion in cash, according to a statement released on Friday.
Swisscom will merge Vodafone Italia with its existing business Fastweb to create Italy’s second-biggest fixed-line broadband operator, behind TIM.
As part of the agreement, Vodafone has said it will return €4 billion to shareholders via stock buybacks, and cut its dividend to 4.5 cents a share from next year, down from 9 cents in 2024.
The deal is expected to be closed in the first quarter of 2025.
“Vodafone Italia and Fastweb will 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,” Swisscom said in a statement.
The sale comes after Vodafone turned down numerous offers from French telecoms company Iliad in late January.
Iliad had made a bid for the Italian branch that would have brought cash proceeds of €6.6 billion to Vodafone, and the subsidiary would have been split 50:50.
Offloading its Italian branch is part of Vodafone’s wider strategy to simplify operations and shed smaller divisions.
“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 Chief Executive Margherita Della Valle.
Last year, the telecoms group sold its Spanish arm to Zegona Communications in a deal worth more than €5 billion.
Vodafone is also seeking to merge its domestic branch with Three UK mobile network, although the move is being stalled by competition regulators.
