Vodafone sells Italian unit to Swisscom for 8 bn euros

British telecoms giant Vodafone has agreed to sell its Italian unit to Swisscom for eight billion euros ($8.7 billion) in a cash deal, the two companies said Friday.

Vodafone, which previously rejected offers from French billionaire Xavier Niel’s Iliad group, has been on a cost-cutting campaign that has included layoffs and the offloading of divisions abroad.

The UK group said it intends to return four billion euros to its shareholders following the sales of its Italian and Spanish businesses, which together total 12 billion euros.

Vodafone chief executive Margherita Della Valle said the deal with Swisscom marked the “third and final step in the reshaping of our European operations”.

“Going forward, our businesses will be operating in growing telco (telephone company) markets — where we hold strong positions — enabling us to deliver predictable, stronger growth in Europe,” she said in a statement.

Swisscom said in a separate statement that it would merge Vodafone Italia with its own Italian subsidiary, Fastweb.

Earlier this year, 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 rebuffed an 11.25-billion-euro approach by Iliad and private equity group Apax Partners in February 2022.

Niel has since taken a 2.5-percent stake in Vodafone.