Vodafone in talks to sell Italian unit to Swisscom

British telecoms giant Vodafone is in advanced talks to sell its Italian unit to Switzerland’s Swisscom, agreeing on a preliminary price of eight billion euros ($8.7 billion), the companies said Wednesday.

Vodafone, which previously rejected offers from French billionaire Xavier Niel’s Iliad group, said it has “engaged extensively with several parties to explore market consolidation in Italy”.

But the potential transaction with Swisscom “delivers the best combination of value creation, upfront cash proceeds and transaction certainty for Vodafone shareholders”.

The two companies, however, cautioned in separate statements that there was no certainty the transaction will ultimately be agreed.

The acquisition of Vodafone Italy would be on a cash and debt-free basis, the companies said.

Swisscom said it would merge Vodafone Italy with its own Italian unit, Fastweb.

Last month, Vodafone rejected a proposal from Iliad to merge their Italian businesses in a deal valuing Vodafone Italy at 10.45 billion euros.

The British mobile phone operator had already rejected an 11.25-billion-euro approach by Iliad and private equity group Apax Partners in February 2022.

Vodafone reported earlier this month that its third-quarter revenues fell 2.3 percent to 11.4 billion euros on poor performances across Italy and Spain.

In late 2023, Vodafone’s chief executive Margherita Della Valle announced the sale of its Spanish division to investment fund Zegona for up to five billion euros.

It followed her decision last year to axe 11,000 jobs, or more than 10 percent of Vodafone’s global workforce, to slash costs.

Britain’s competition regulator, meanwhile, is investigating Vodafone’s plan to merge its British mobile phone operations with those of Three UK, owned by Hong Kong-based CK Hutchison.