:max_bytes(150000):strip_icc()/GettyImages-1470479994-ea33e8be5883463aaa6ebc683b442650.jpg)
:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-1470479994-ea33e8be5883463aaa6ebc683b442650.jpg)
Key takeaways
- Vodafone said it had agreed to sell its Italian unit to Swisscom for 8 billion euros ($8.7 billion) and would undertake a share buyback with EUR4 billion of the proceeds.
- The sale completes the British firm’s European restructuring strategy under CEO Margherita Della Valle.
- Vodafone is looking into growing its B2B business, while focusing on key European markets.
Vodafone Group Plc (VOD) on Friday said it had struck a deal to sell its Italian division to Swisscom AG for 8 billion euros ($8.7 billion).
The British telecom company said it intends to distribute EUR4 billion of the proceeds from the sale to its shareholders via share buybacks. Vodafone said the sale is the last stage in its strategy of restructuring its European operations.
Vodafone CEO Margherita Della Valle said in a statement that the sale of the Italian and Spanish units would provide the telecom firm with EUR12 billion in “upfront cash proceeds.”
Della Valle announced a strategy aimed at cutting the U.K. firm’s debt and streamlining its operations in May last year.
In June, Vodafone and CK Hutchison, which owns Britain’s Three UK mobile phone network, announced they would be merging their U.K. telecom businesses, and in October, Vodafone sold its Spanish unit to Zegona Communications for 5 billion euros.
The sale also comes as the company seeks to grow its business-to-business customers and focus on key European markets. Vodafone said it is expanding its mobile- and fixed-line services in Africa.
American Depositary Receipts (ADR) of Vodafone were 6% higher at $9.00 at 11:18 a.m. ET Friday following the news. They have fallen about 21% over the past year.