Vodafone Italy could soon speak Swiss: the British group has started negotiations with the Swiss Swisscom to sell 100% of its Italian operations. An operation that could revolutionize the telecommunications landscape in our country. The terms of the transaction have yet to be finalized, but the two groups have reached a preliminary agreement on the purchase value of 8 billion euros, which must be done in cash and without debt. L'obiettivo of Swisscom? Unire Vodafone Italy with its subsidiary Fastweb, opening the door to an era of synergies and growth. This is what we read in a note from the Swiss telecommunications group.
The news pushed the telecommunications sector higher across Europe. The title of Vodafone has lost some momentum and at mid-session it gained 0,34% to 68,63 euros per share. While Swisscom loses 0,9%. Telecom Italia instead benefits +0,39%.
Swisscom wants to buy Vodafone: here's why
The confirmation also comes from Swisscom (controlled by the Swiss Federal Council, which owns 51% of the company and which will have to give approval to the deal and the related outlay). In a note released by the Swiss giant, it is underlined that this move should lead to an increase in value and cash flows for Swisscom and that, following the acquisition, the group "maintains at least an A corporate rating and that there is a positive impact on Swisscom's dividend policy". But there's more: the new combined entity, resulting from merger between Vodafone Italia and Fastweb, would create a leading group in the sector, based on the convergence of activities.
For Vodafone, this transaction would represent "the best combination of value", as the CEO stated Margaret of the Valley. And it's not just words, but facts: the cash payment and total sale of Vodafone Italia were preferred over higher valuations, such as the one advanced by Iliad in January. However, as a note specifies, it is not certain that the transaction will be successful.
Interestingly, Vodafone also revised down its Ebitdal (Earnings Before Interest, Taxes, Depreciation, Amortization, and Leasing) figures in this morning's release. This means that, according to the new parameters, Fastweb's offer would have a lower multiple than that of French Iliad. The latest proposal made public by the French envisaged the creation of a newco 50% owned by Vodafone and Iliad, with the British group that would have obtained 6,6 billion euros in cash and shareholder financing of 2 billion euros, with a enterprise value of Italian activities equal to 10,45 billion euros.
Vodafone-Fastweb: what would be the advantages of this merger?
First, less resistance from the authorities Antitrust compared to an alliance between Vodafone and Iliad. Furthermore, the resulting new entity would be the second largest fixed broadband operator in Italy, with a strong presence in the highly profitable fixed business segment. In short, an era of changes awaits in the world of Italian telecommunications. With this merger, Vodafone and Fastweb aim to become the point of reference for the convergence of telecommunications in our country, offering high quality services and bringing value to shareholders. It only remains to be seen what the future holds for this alliance in the increasingly competitive telecommunications landscape.
