BY Fraser Tennant
In the latest round of telecommunications sector consolidation in Europe, Swisscom AG is to acquire 100 percent of Vodafone’s Italian business in a transaction valued at €8bn.
The Swiss government-controlled Swisscom intends to merge Vodafone Italia with Fastweb, Swisscom’s Milan-based subsidiary. The deal will create Italy’s second-biggest fixed-line broadband operator behind Telecom Italia Mobile.
The acquisition is a key step for Swisscom to achieve its strategic objective of profitable growth in Italy, bringing together complementary high-quality mobile and fixed infrastructures, competencies and capabilities to create a leading converged challenger in a market with material growth opportunities.
The deal follows the merger of French mobile operator Orange’s Spanish business with rival MasMovil in February 2024 and Vodafone selling its Spanish unit to Zegona Communications in October 2023.
“Through this transaction, Swisscom significantly reinforces its presence in Italy, where it has been operating successfully since 2007 through Fastweb,” said Christoph Aeschlimann, chief executive of Swisscom. “Fastweb has grown by over 50 percent in terms of customers, revenue and adjusted earnings before interest, taxes, depreciation and amortisation over the past 10 years, and has established itself as a leading challenger in Europe’s fourth largest broadband market.”
Swisscom has targeted €600m in annual savings mainly from migrating mobile customers from Fastweb to the Vodafone network, enabling the combined entity to unlock significant value for all stakeholders, sustain investments in the Italian telecommunication market and offer innovative, competitively priced converged services.
“The sale creates significant value for Vodafone and ensures the business maintains its leading position in Italy, which has been built through the dedicated commitment of our colleagues to serving our customers over many years,” said Margherita Della Valle, group chief executive of Vodafone. “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.”
The transaction, which is expected to close in the first quarter of 2025 and does not require a shareholder vote, is subject to regulatory and other customary approvals.
Mr Aeschlimann concluded: “By combining Fastweb’s strengths in fixed connectivity with Vodafone Italia’s leading position in mobile services, the new entity stands to deliver substantial benefits to Italian consumers, businesses and the country.”
News: Swisscom buys Vodafone Italia for $8.7 billion as telcos consolidate