Swisscom on Tuesday hastened to close the 8 billion-euro acquisition of Vodafone Group's Italian operations, a move that the Swiss telecommunications company said is essential to its strategic objective of profitable growth in Italy. Vodafone Italia's popular mobile services will blend with the fixed connectivity strengths of Fastweb, which Swisscom acquired in 2007, according to a Thursday release.
The outcome will be a new converged challenger called Fastweb + Vodafone, which will offer innovative and competitively priced converged services to potential customers in Italy. "I am thrilled about the successful closing, as it strengthens Swisscom Group," said Swisscom Chief Executive Officer Christoph Aeschlimann.
"The improved positioning in Italy will create long-term value for all stakeholders -- thanks to growing cashflows and dividends in the future. At the same time, the focus on the Swiss market remains unchanged with continued high investments in innovation, top-quality service, and next-generation infrastructure." The cash deal will also provide increased scale, a more efficient cost structure, and annual run-rate synergies of 600 million euros, Swisscom reiterated.
The existing commercial brands Fastweb, Vodafone, and ho. will be preserved in the combined entity. Meanwhile, the British telecommunications company said, "The transaction values Vodafone Italy at a multiple of 7.6x consensus Adjusted EBITDAaL and c.26x OpFCF for FY24, representing a premium to the Group's trading multiple and the highest OpFCF multiple of any Vodafone market transaction in the last 10 years." Vodafone Group, which has telecom operations in Europe and Africa, will use the sale proceeds to reduce net debt and potentially return up to 2 billion euros to shareholders.
The group agreed to provide certain services to Vodafone Italy for up to five years. Since Swisscom obtained regulatory approvals and closed the acquisition before the first quarter of 2025, it included integration costs of up to 200 million euros in its full-year 2024 EBITDA calculations, adjusting it to the range of 4.3 billion francs to 4.4 billion francs, from the previous guidance of 4.5 billion francs to 4.6 billion francs.
The 2024 outlook for revenue, capital expenditure, free cash flow, and dividend remains unchanged. Vodafone shares gained marginally in London on Thursday morning..