Swisscom Buys Vodafone Italy

In the latest round of consolidation amongst European telecoms, Switzerland-based carrier Swisscom has acquired Vodafone Italy. The deal, valued at €8 billion (~$8.7 billion), will be completed by the first quarter of 2025.

Part of the proceeds—up to €2 billion—will be redistributed next year to the Swiss company’s shareholders through share buybacks. From the 2025 financial year onwards, there will also be an 18% increase in dividends, for a total of about €1.1 billion.

The acquisition, that will be paid in cash financed through new debt, will help create about €600 million in savings, and it will focus on merging Vodafone Italy with Fastweb, Swisscom’s Italian subsidiary.

Swisscom CEO Christoph Aeschlimann expects the deal to “generate high added value for all stakeholders,” with both “private and business customers benefiting.”

According to Liana Logiurato, a Board adviser on over $100bn M&A and $20bn capital raisings with UBS, Nomura and Syngenta, who coincidentally was advisor on the IPO of Swisscom in 1998. “Swisscom acquires a prime property and creates the largest Fiber-To-The-Home provider in Italy, bringing together leading mobile services player Vodafone Italy with the strengths of fixed services provider Fastweb,” she notes.

The new entity will be Italy’s second-largest broadband operator and further stir up competition in an already fierce market.

The biggest Italian operator, Telecom Italia, is currently in the process of selling its long-disputed fixed line grid to US fund KKR, in a blockbuster €22 billion deal. Given the stiff competition, two other leading mobile carriers in the country, Hong Kong-owned Wind-Tre and France’s Iliad, are also looking for possible deals. Iliad recently also eyed Vodafone Italy, but Swisscom prevailed.

The proposed merger will now have to be reviewed by the Italian antitrust regulator.