For 8 billion euros: Swisscom wants to take over Vodafone Italia

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Future planning at Swisscom: The Swiss telecommunications group wants to take over mobile phone provider Vodafone Italia for 8 billion euros (7.6 billion francs) and merge it with its Milan broadband subsidiary Fastweb. However, the agreement has not yet been signed and it is not yet clear whether a transaction will take place. However, as can be seen from Wednesday’s statement, the negotiations have made considerable progress. According to knowledgeable sources, the acquisition is planned for this year.

Swisscom subsidiary Fastweb contributed 23 percent of Swisscom’s total sales last financial year (a good 11 billion francs), or about 2.6 billion francs, according to the annual report. Vodafone Italy, on the other hand, achieved sales of approximately 4.4 billion euros in the 2022/23 fiscal year, which ended last March. The joint company is expected to have a turnover of around 7 billion euros and will be Italy’s second largest telecommunications provider after industry leader TIM.

8700 employees together

Fastweb’s share of the operating results before depreciation (EBITDA) of 4.6 billion francs is 17 percent, that is, around 780 million francs. Vodafone Italy’s EBITDA in the last financial year was 1.7 billion euros. As of March last year, Vodafone Italy employed approximately 5,700 people; Fastweb had 3,000 people.

According to the statement, Fastweb and Vodafone Italy will complement each other well. Fastweb is strong in fixed line network and Vodafone is strong in mobile communications. The Swiss company maintained that there were only a few overlaps. The acquisition will have a positive impact on Swisscom’s dividend and cash flow.

That’s why Swisscom wants Vodafone Italy

Swisscom took over Fastweb in 2007. The Swiss telecommunications group hoped that this would provide growth opportunities because the Swiss market was already quite saturated at that time. From the beginning, Fastweb only offered broadband and had to purchase mobile communications. This will change with the acquisition of Vodafone.

This gives Swisscom the opportunity to offer bundled packages for broadband network and mobile communications in Italy. With such offers, the Swiss company can ultimately retain its customers better.

Economies of scale, more efficient cost structures and “significant synergy potential” will also enable the company of the future to “create added value for all stakeholders,” according to the statement. The company speaks of an “important step” to continue fully achieving “the long-term goal of value growth in Italy and the strategic objectives of the Federal Council.”

Backgrounds from Vodafone

The sale of the Italian subsidiary would also be beneficial for the British Vodafone group. According to media reports, he is more of a troubled child than a model student. A December statement from Vodafone said it supported “market consolidation in countries where the company is unable to generate adequate returns on invested capital.”

According to the group, this situation also applies to Italy, so the business there needs to be sold or merged. Finally, the establishment of a joint venture in Italy with its French rival Iliad failed due to different price expectations. (SDA)

Source :Blick