Vodafone is selling its Italian business to Swisscom for €8bn (£6.8bn) cash and plans to return €4bn to shareholders.
The telecoms company said it had reached an agreement to sell Vodafone Italy as part of wider plans to reshape its European operations and that some of the proceeds would be returned to investors via share buybacks.
Vodafone and Swisscom have agreed that Vodafone will continue to provide certain services to Swisscom for up to five years, as part of the deal.
The disposal in Italy is one of a number of steps that the chief executive, Margherita Della Valle, has made since she became chief executive to reposition Vodafone.
Her actions have also included a disposal in Spain and a proposed merger with Three in the UK – which would create the UK’s largest mobile phone operator.
The Three deal is being examined by the Competition and Markets Authority, the antitrust regulator, which is looking at whether the transaction should proceed or whether the acquisition should be subjected to a more detailed, phase 2 investigation on competition grounds.
Vodafone, which has recently seen its share price stall to 25-year lows, has said it wants to focus on its B2B business and on those growing telecoms markets in Europe where it already holds a strong position.
“Our transactions in Italy and Spain will deliver €12bn of upfront cash proceeds and we intend to return €4bn to shareholders via buybacks as part of our broader capital allocation review,” Della Valle said in a statement on Friday, adding that the disposal created “significant value for Vodafone”.
Vodafone reiterated on Friday that it saw its biggest growth opportunity in B2B, where it is well placed to support the public sector and small businesses looking to transition to generative artificial intelligence and the cloud. It also highlighted new opportunities in Africa, where it believes there is an opportunity to expand its mobile and fixed-line businesses and where its fintech platform already has more than 75 million customers.
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It plans an organisational shake-up from next month to structure itself in five business divisions: Germany; European markets; Africa; Vodafone Business; and Vodafone Investments. Philippe Rogge will step down from his position as chief executive of Vodafone Germany and is leaving the business, Vodafone added.
