VODAFONE AND ILIAD DISCUSS MERGER IN ITALY
by Pamela Barbaglia and Elvira Pollina
LONDON (Reuters) – Iliad and Vodafone are in talks to strike a deal that would merge their respective subsidiaries in Italy to end fierce competition in the telecoms sector in the eurozone’s third-largest economy, officials told Reuters. sources familiar with the matter.
Discussions between the two groups are ongoing and both sides are actively exploring ways to reach a rapprochement, the sources added on condition of anonymity.
Iliad, delisted since its acquisition by its founder and director Xavier Niel, is working with the investment bank Lazard on its strategic projects in Italy, said one of the sources, who specifies that an agreement is not however not sure.
If their merger in Italy is successful, the new entity would have a mobile market share in the peninsula of around 36% and a combined turnover of nearly six billion euros.
Iliad and Vodafone declined to comment, while Lazard was not immediately available.
The parent company of Free in France, which will make its debut in wired broadband in Italy on January 25, has studied several options in recent months to strengthen itself in the peninsula, amid an appetite for acquisitions in the sector. , the sources said.
The American fund KKR formulated at the end of last year a purchase proposal of 10.8 billion euros from Telecom Italia.
Xavier Niel, who created Iliad in 1990 and sits on KKR’s board as an independent director, wants to play the role of kingmaker in the fragmented Italian telecom market where he launched a price war in 2018 upon his arrival. in the peninsula.
Industry leaders have long argued for a reduction in the number of players in Italy, believing that a shift from four mobile operators (TIM, Vodafone, WindTre and Iliad) to three would unlock cost synergies and increase margins.
Benedetto Levi, managing director of Iliad Italy, declared on January 13 that the group was open to buying a competing operator.
“If a company, in whole or in part, becomes available on the market, we will examine it without any preconceived ideas,” he told the financial daily Il Sole 24 Ore.
Nick Read, the managing director of Vodafone, had declared, for his part, on November 17 that consolidation was necessary in Europe, particularly in Italy, Spain and Portugal where “all players are suffering”.
(Report Pamela Barbaglia in London and Elvira Pollina in Milan, with the contribution of Mathieu Rosemain in Paris; French version Claude Chendjou)