Vodafone Group PLC has finalized the sale of its Italian operations, Vodafone Italy, to Swisscom AG for €8 billion in cash proceeds. This move marks the completion of the company's portfolio right-sizing strategy announced in May 2023. The sale is part of a broader reshaping of Vodafone's European footprint, focusing on growing markets with strong positions and local scale.
The sale of Vodafone Italy and Vodafone Spain, along with the merger of Vodafone UK and Three UK, will allow Vodafone to concentrate its operations in Europe on growing markets where it holds strong positions. The company aims to accelerate its performance in these markets and expects the new geographic footprint to result in a significant increase in Vodafone Group ROCE.
Vodafone's biggest growth opportunity lies in the B2B sector, where it is well-positioned to support SMEs and Public Sector customers in transitioning to the Cloud and generative AI. The company also plans to strengthen its range of platforms and capabilities through investments and new partnerships, particularly in the IoT sector.
In Africa, Vodafone will continue to drive growth through mobile connectivity, fixed connectivity, and financial services. The company is a market leader in mobile and sees a significant opportunity to expand its fixed connectivity services to reach a wider share of the population. Additionally, Vodafone's FinTech platform is already serving over 75 million customers with double-digit growth.
To better serve its own markets and telecoms partners, Vodafone will transition the majority of its central operations to a fully commercial model, allowing for flexible and efficient responses to changes in demand. The company also plans to open its platforms and services to third parties, providing them with access to shared operations such as procurement, roaming, IoT, and other business platforms.
As part of the sale of Vodafone Italy and Vodafone Spain, Vodafone intends to return €4 billion to shareholders via buybacks, as part of its broader capital allocation review. The company also announced a new capital allocation framework, including a dividend to be rebased to 4.5c per share from FY25 onwards and a new leverage range of 2.25x - 2.75x.
The sale of Vodafone Italy to Swisscom represents a significant value-creating opportunity for Vodafone and ensures the business maintains its leading position in Italy. The transaction is expected to deliver €12 billion of upfront cash proceeds, with €4 billion to be returned to shareholders via buybacks.