Iliad wants to merge its activities with Vodafone in Italy. If the very expensive operation was successful, Free’s parent company would train, on site, a player who could play the role of number one operator.
The Iliad group announced, Monday December 18, 2023, that it had officially proposed a merger between its Italian subsidiary and Vodafone Italia, valuing the latter at 10.45 billion euros. If the operation is confirmed, Vodafone will receive 8.5 billion euros. The discussions should lead to the creation of a completely new entity, called “NewCo”, which would compete in number of subscribers with the operator TIM, leader in the country. Clubic gives you a little more detail.
Iliad and Vodafone would create the most innovative telecom challenger in Italy
The merger of Iliad and Vodafone in Italy could give birth to the most innovative telecom challenger in the world. It would give rise to the creation of NewCo, a company owned 50-50 by the two operators, which together are worth 15 billion euros today (10.45 billion for Vodafone, 4.45 billion for Iliad Italia) . More than a year ago, Iliad had already made a first approach, rejected by Vodafone. This time, there is room for discussion.
Once created, NewCo would emphasize price accessibility, an approach well inscribed in Free’s genes; but also connectivity and digital inclusion, also with the objective of supporting digital transformation and the deployment of optical fiber, as well as that of 5G.
On paper, Iliad’s proposal offers significant value to Vodafone Italia, with a substantial premium that values the company at €10.45 billion. The proposal certainly meets Vodafone’s intention to transform the group and simplify its operations, while providing liquidity and value.
With NewCo, Iliad and Vodafone would directly compete with TIM, number one in Italy
Iliad indicates this Monday that the financing of the merger is supported by leading banks of international stature, promising to create a solid player, which should generate a turnover of around 6 billion euros, and an EBITDAaL (the profitability indicator) estimated at 1.6 billion euros by the end of the next financial year.
Thomas Reynaud, CEO of the Iliad group, highlights NewCo’s commitment to Italy’s digital transformation, “ with more than 4 billion euros of investments planned over the next 5 years », Indicates the manager.
Iliad’s proposal marks a crucial turning point in the evolution of the Italian telecommunications market. Around TIM and Wind Tre, NewCo would contribute to a phenomenon of concentration around three imposing players, of which it could become the leader. Today, Iliad Italy has 10.6 million mobile subscribers, for around 13% market share. Vodafone, currently number 3, has around 18 million customers. TIM, the market leader, has around 30 million subscribers.
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