Iliad announces that it wants to merge its Italian activities with the operator Vodafone. With this operation, Iliad says it wants to give birth to “the most innovative challenger in an Italian market which has 5 mobile network operators and more than 10 fixed broadband service providers”.
It is to face strong competition on the Italian market that Xavier Niel’s group is proposing to the British Vodafone to merge their activities. “The proposed merger would create the most innovative challenger in an Italian market which has 5 mobile network operators and more than 10 fixed broadband service providers,” assures Iliad.
Iliad had made a takeover offer of 11.25 billion euros for Vodafone Italia in February 2022. But the British group rejected it. And that could change. Because it was the form of the operation that had slowed down the operation, explained Emma Mohr-McClune, director of technological services at GlobalData. For her, Vodafone’s favors at the time would have gone more towards “a more balanced model of joint venture or merger”.
Vodafone would “obtain 50% of the share capital” of the new entity
If Vodafone accepts the proposal, Vodafone “would obtain 50% of the share capital” of the new entity assures Iliad, “as well as a cash payment of 6.5 billion euros and a shareholder loan of 2.0 billion euros ‘euros’. For its part, Iliad Italia “would obtain 50% of the capital” of the entity, “as well as a cash payment of 500 million euros and a shareholder loan of 2.0 billion euros”.
“The combined entity should generate a turnover of approximately 5.8 billion euros,” judges Iliad.
“The context of the Italian market requires the creation of an innovative challenger operator, capable of both being competitive and creating value in a competitive environment,” commented Thomas Reynaud, CEO of Iliad, citing “the profiles and complementary expertise of Iliad and Vodafone in Italy”.
“Comfort letters from several leading banks”
The new entity thus created “would be fully committed to accelerating the digital transformation of the country and in particular the adoption of optical fiber and the deployment of 5G, with more than 4 billion euros of investments planned over the next 5 years,” promised Thomas Reynaud.
In mid-November, Iliad announced “record” commercial performances in France and Italy, with consolidated turnover for the third quarter up 9.5% year-on-year, to 2.35 billion euros.
The operator announces on the financing side that it has “comfort letters from several leading banks”.
In March, the French group affirmed its ambition to become “one of the three major European telecom operators”.
Vodafone, for its part, announced last March the elimination of 1,000 jobs in Italy to reduce costs.