Swisscom’s €8 billion acquisition of Vodafone’s struggling Italian business has been approved by the country’s competition authorities.
The deal was approved by the Italian Competition Authority and the Ministry of Enterprises and Made in Italy, Swisscom said. It expects the sale to complete by the end of March to create what will be Italy’s second-largest fixed-line broadband operator.
Margherita Della Valle, the Vodafone chief executive, is looking to simplify the company’s vast business.
In January Vodafone rejected an offer to create a joint venture in Italy with its smaller French rival Iliad. That would have given it €6.6 billion cash in a deal that valued its Italian business at €10.45 billion.
Swisscom said of its takeover: “This paves the way for the creation of a leading converged challenger in Italy.”
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This month the Competition and Markets Authority (CMA) approved the £15 billion merger of Vodafone UK and Three, the network owned by CK Hutchison, the Hong Kong investor. With 29 million customers it will be Britain’s biggest mobile operator.
The FTSE 100 group also secured €5 billion from the sale of Vodafone Spain to Zegona Communications, a British investment fund run by former Virgin Media executives.
Vodafone has long been weighed down by its huge debt, high costs and intense competition.
The cash from the deals is expected to be used to pay down its owings, fund a €4 billion share buyback and invest more in the UK and Germany.
Under the terms imposed by the MCA, the Vodafone-Three group promised to invest £11 billion in its 5G network over eight years and cap some prices for three years.
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It was a rare move by the British regulator, which had previously blocked similar mergers or pushed for significant divestments, as well as warning that the deal could push up prices for customers.
Vodafone will own 51 per cent of the Vodafone-Three group and it has an option to buy the rest of the business from Hutchison within three years. The merger is expected to complete in the next six months.
Vodafone was approached for comment.
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