Vodafone Completes €8 Billion Sale of Italian Operations to Swisscom

2 min read | January 01, 2025 11:30 PM PST | By Team Kalkine Media

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Vodafone Completes €8 Billion Sale of Italian Operations to Swisscom — Image source: Shutterstock

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Highlights:

Sale of Vodafone Italy: Vodafone has sold its Italian operations to Swisscom for €8.0 billion, valuing the business at 7.6x Adjusted EBITDAaL and approximately 26x OpFCF for FY24.

Continued Service Agreement: Vodafone will continue to provide certain services to Vodafone Italy for up to five years following the completion of the deal.

Use of Proceeds: The proceeds from the sale will be used to reduce Vodafone Group’s net debt, with plans to return up to €2.0 billion to shareholders after the completion of the current buyback program.

Vodafone Group Plc (LSE:VOD) has announced the successful completion of the sale of its Italian operations ("Vodafone Italy") to Swisscom AG ("Swisscom") for a cash consideration of €8.0 billion. This marks a significant milestone in Vodafone's strategy to streamline its operations and reduce net debt.

The transaction values Vodafone Italy at a multiple of 7.6 times consensus Adjusted EBITDAaL and around 26 times operating free cash flow (OpFCF) for the fiscal year 2024. These multiples represent a premium compared to Vodafone's overall trading multiples, and it is the highest OpFCF multiple for any Vodafone market transaction in the last decade.

As part of the deal, Vodafone and Swisscom have entered into an agreement where Vodafone will continue to provide certain services to Vodafone Italy for up to five years after the transaction's completion, ensuring a smooth transition for both parties.

Vodafone has outlined that the proceeds from this sale will primarily be used to reduce its group-level net debt. Additionally, the Vodafone Board plans to return up to €2.0 billion to shareholders, as previously stated in the transaction announcement on 15 March 2024, following the completion of the ongoing buyback program.

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