This is another completed step in Vodafone Group’s strategy to reshape its European footprint and business
Having obtained all regulatory approvals, Swisscom completed the acquisition of Vodafone Italia somewhat earlier than expected, on 31 December.
The plan is that its Italian fixed infrastructure business, Fastweb, will combine with Vodafone Italia’s mobile network to “bring together complementary high-quality mobile and fixed infrastructures, competencies, and capabilities to create a leading converged challenger in Italy”.
The combined entity, will offer “innovative, competitively priced converged services to Italian consumers and businesses,” according to the Swiss giant, and “is a key step in achieving its strategic objective of profitable growth in Italy”.
Scale and cost structure
Swisscom is expecting “increased scale, a more efficient cost structure and significant annual run-rate synergies of €600 million” but has revised its EBITDA guidance for 2024 because of the transactional costs it incurred of up to €200 million.
Walter Renna, CEO of Fastweb + Vodafone, comments, “We herald a new era in Italian telecommunications. By embracing the opportunity of combined forces, we create a stronger, more innovative organisation to lead Italy into a sustainable digital future, empowering people, businesses and public administrations.”
Swisscom CEO Christoph Aeschlimann concludes: “I am thrilled about the successful closing, as it strengthens Swisscom Group. The improved positioning in Italy will create long-term value for all stakeholders – thanks to growing cashflows and dividends in the future. At the same time, the focus on the Swiss market remains unchanged with continued high investments in innovation, top-quality service, and next-generation infrastructure.”
Vodafone’s perspective
Press information from Vodafone noted that the transaction values Vodafone Italy at a multiple of about 26 times the operating free cash flow for FY24, the highest such multiple of any Vodafone market transaction in the last 10 years.
Proceeds from this sale will be used to reduce Vodafone Group’s net debt. Vodafone’s board plans to hand shareholders up to €2 billion, once it completes its current buyback programme.
Vodafone Group will continue to provide some services to Vodafone Italy for up to five years.
The Group adds that divesting itself of Vodafone Italy is the final step in the reshaping of Vodafone’s European footprint: the other steps are the merger with Three in the UK, which finally was given regulatory permission to proceed at the beginning of December, and the sale of Vodafone Spain to Zegona for €5 billion, which completed in May 2024.
Vodafone says it will now focuse on making its European markets more profitable, investing in fixed and mobile infrastructure. One of its main markets, the UK, was recently found by Opensignal to have the least reliable mobile coverage of all the G7 countries, while it continues to struggle in its largest market.
New executive committee
Swisscom’s process to integrate Fastweb and Vodafone Italia starts immediately. The combined entity will be led by the newly appointed Executive Committee, operating under the corporate brand Fastweb + Vodafone.
The new Executive Committee is drawn from execs at both units, Swisscom says. Perhaps somewhat surprisingly, the new Chief IT and Chief Technology Officers are yet to be announced. In the meantime, the roles will be carried out by John de Keijzer and Mark Düsener respectively.
Other key roles that have been assigned include Walter Renna as CEO, Anita Carra is Chief Brand & B2C Marketing Officer, Fabrizio Casati becomes Chief Wholesale Officer and Elenia Cerchi Chief Regulatory & Antitrust Officer.
Augusto Di Genova is Chief B2B Officer, Peter Grueter Chief Financial Officer, Alessandro Magnino Chief Strategy & Transformation Officer and Federico Negri becomes Chief B2C Commercial Officer.