It failed for Iliad. Free’s parent company was dismissed by Vodafone Italy, which rejected its buyout offer amounting to 11.25 billion euros. Xavier Niel’s holding company had been on the move for a few weeks, however, with the intention of forging an agreement to merge Free and Vodafone in Italy to impose the new player as a strong competitor to TIM and WindTre, the two other operators present. on the transalpine market.
The operation would indeed have made it possible to increase the portfolio of mobile customers of Free Italy to more than 11 million, whereas the operator now has 8.5. It would also have given the latter the opportunity to fill its workforce of fixed customers with three million additional subscribers, even though it has just launched its own fixed offers on the Italian market.
Alas, Iliad’s offer did not succeed. The management of the holding company confirmed the information on Thursday. And to defend its content, recalling that the offer, entirely in cash, would have “made it possible to reflect a very high premium for Vodafone Italy” and to respond to the ongoing consolidation movement in Europe, this “in the best interests of shareholders” from the Italian operator. “Iliad Italia will pursue its standalone strategy based on its excellent results: more than 8.5 million mobile subscribers in 3.5 years, a successful launch of its fixed broadband offer and growth of more than 20% revenue billed to subscribers in 2021, “said the management of the Italian branch of Xavier Niel’s group.
Towards a consolidation of European players?
Such a marriage would not have been surprising, however, since the management of Vodafone recently said it was open to opportunities for the sale of its subsidiaries in Italy, Spain and Portugal, under pressure from the activist fund Cevian Capital. However, it is the form of the operation that could slow down the operation, as noted by Emma Mohr-McClune, director of technological services at GlobalData.
“It was clear that Iliad’s confirmed offer for 100% of Vodafone Italy would not be considered favorably,” said the latter. For her, Vodafone’s favors would instead have gone to “a more balanced joint venture or merger model, such as the one the company is currently operating in the Netherlands to retain a stake in these markets, while maximizing cost savings and efficiencies. operations planned as part of its ongoing enterprise-wide structural separation and digital platform rationalization activities.
However, “this bid marks the start of what is clearly going to be a lively and potentially unconventional auction season for Vodafone’s European assets in the UK, Italy, Portugal and Spain”, argues the latter. It should be noted that the consolidation movement at work in Europe is notably due to French players. Like Orange, which is currently negotiating to merge its Spanish branch with its competitor MasMovil, the fourth player in the Spanish market.