Vodafone has agreed to sell its Italian business to Bern-based telecommunications firm Swisscom for €8 billion in cash.
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As part of the Transaction, Vodafone and Swisscom have agreed that Vodafone will continue to provide certain services to Swisscom for up to 5 years.
The annual charge for the Group Services to be paid by Swisscom to Vodafone for the first year after completion is estimated at approximately €350 million, of which approximately €176 million reflect charges currently reported below Vodafone Italy’s segmental Adjusted EBITDAaL.
Vodafone and Swisscom are also exploring a closer commercial relationship to enable collaboration across a broad range of areas, beyond Italy.
The key areas of commercial collaboration that Vodafone and Swisscom are exploring include IoT, enterprise services and solutions, procurement, operational shared services and roaming.
The Transaction constitutes a Class 1 transaction for Vodafone under the current UK Listing Rules and is, therefore, as at the date of this announcement, conditional on Vodafone shareholders passing a resolution approving the Transaction (the “Shareholder Approval Condition”).
As the UK Listing Rules are expected to change in the summer of 2024 in a manner that would mean the Shareholder Approval Condition is no longer required, the Parties have agreed that should the UK Listing Rules be amended before 30 September 2024, then the Shareholder Approval Condition will no longer apply.
Completion is targeted in the first half of 2025. The Board of Vodafone has unanimously approved the Transaction and each of Vodafone’s Directors who hold shares have agreed to enter into a customary irrevocable undertaking to vote in favour of any resolution to approve the Transaction.
The Transaction is also conditional on certain regulatory approvals, including clearance by the Italian Competition Authority. The Transaction is not conditional on the approval of Swisscom’s shareholders.
Vodafone has further agreed that, if the approval of Vodafone’s shareholders is required and the Transaction is not approved at any such General Meeting, and Vodafone subsequently enters into an agreement for an alternative transaction involving Vodafone Italy within 12 months, Vodafone shall pay Swisscom a break fee of €150 million. ■
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