Swisscom signs purchase agreement for Vodafone Italy
Published: Friday, Mar 15th 2024, 08:30
Updated At: Friday, Mar 15th 2024, 08:00
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Swisscom has finalized its billion-euro takeover in Italy. The largest Swiss telecommunications group has signed the purchase agreement for Vodafone Italy. Swisscom is putting 8 billion euros on the table for the mobile operator.
Vodafone Italy is to be merged with the Milan-based Swisscom subsidiary Fastweb, the "blue giant" announced in a press release on Friday. This will create the second-largest telecom provider in Italy behind the top dog TIM with a combined turnover of 7.3 billion euros and a combined operating profit before depreciation and amortization (EBITDA) after leasing of 2.4 billion euros. The deal had already been announced at the end of February.
Vodafone Italy and Fastweb complement each other well: while Fastweb has a broadband network, Vodafone Italy contributes a mobile network. This allows the two companies to eliminate their respective weaknesses in the Italian telecoms market and save costs. Until now, Fastweb has had to rent capacity from other mobile providers for its mobile customers.
Fastweb's cell phone customers will now be able to make calls using the Vodafone mobile network in Italy. This will enable the joint company to offer customers bundled fixed and mobile services. The merger of Fastweb and Vodafone Italy is expected to generate synergies of 600 million euros per year.
More dividend
The takeover will lead to a significant increase in value. This will please Swisscom shareholders, and above all the federal treasury: the Swiss telecoms group intends to increase the dividend from CHF 22 to CHF 26 from 2026. The company is aiming for a further increase in the dividend in the coming years, it added.
The acquisition will be fully debt-financed, increasing Swisscom's leverage ratio to 2.6x net debt to EBITDA at the end of 2025. At the same time, the strong balance sheet will be maintained. "Swisscom expects to be able to maintain its corporate rating of 'A'", the Group wrote.
Die Transaktion wird voraussichtlich im ersten Quartal 2025 abgeschlossen sein, vorbehaltlich der Zustimmung der Aufsichtsbehörden. Die Zustimmung der Swisscom-Aktionäre ist jedoch nicht erforderlich.
Approval from the federal government
Das Geschäft war kürzlich in der politischen Arena kritisiert worden. Dennoch hat der Verwaltungsrat der Transaktion einstimmig zugestimmt, hieß es. Das bedeutet, dass auch der Vertreter der Bundesregierung grünes Licht für den Milliardenkauf gegeben hat.
"The Swisscom Board of Directors has thoroughly and comprehensively examined the opportunities and risks of this transaction and is convinced that the opportunities for all parties involved far outweigh the risks of a transaction of this magnitude. The takeover of Vodafone Italia is in line with the Federal Council's strategic objectives for Swisscom," explained Michael Rechsteiner, Chairman of the Board of Directors.
And Italy is not the end of the story: Swisscom and the Vodafone Group are also looking into a closer business relationship. In particular, this involves possible cooperation - also beyond Italy - in various areas such as IoT, business services and solutions, procurement, operational shared services and roaming.
©Keystone/SDA
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