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The sale of Vodafone Spain to Zegona is on track for completion in May
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Swisscom’s planned purchase of Vodafone Italy also jumps a regulatory hurdle
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Meanwhile, Vodafone’s CEO insists that no remedies are warranted for the proposed U.K. merger
Vodafone is seeing some progress with plans to sell its operations in Italy and Spain while its plan to form a joint venture in the U.K. market continues to await antitrust approval.
Last week, the group gained final regulatory approval from the Spanish government for the sale of Vodafone Spain to Zegona Communications and said the transaction is expected to complete at the end of May. The operator is then expected to receive €4.1 billion in cash and €0.9 billion in the form of redeemable preference shares.
Over in Italy, meanwhile, Swisscom has just received partial regulatory clearance for its proposed acquisition of Vodafone Italy — an €8 billion deal that is expected to complete in the first quarter of 2025.
According to the Swiss operator, the Italian Presidency of the Council of Ministers “has unconditionally approved the acquisition pursuant to the Golden Power legislation,” referring to the special power of the Italian government to limit or stop foreign direct investments in assets deemed strategic for Italy.
Swisscom noted that the transaction is still subject to approval by the Italian competition authority and other customary approvals including from the Swiss competition authority, Italy’s regulator AGCOM and ministry MIMIT, and the European Union’s Foreign Subsidies Regulation.
However, Vodafone is already confident enough to list its Italian and Spanish businesses as discontinued operations in its reporting for the financial year to March 31, 2024.
Meanwhile in the UK
The same cannot be said for the proposed merger of Three UK and Vodafone UK. While the transaction has been given conditional approval by the U.K. government on national security grounds, it remains unclear what the outcome of the in-depth investigation by the Competition and Markets Authority (CMA) will be.
Indeed, the CMA recently said it decided to extend the inquiry period, which currently has a statutory deadline of Sept. 18, 2024, because Three UK’s parent company CK Hutchisonfailed to provide certain documents and information by May 9.
Speaking during Vodafone’s recent earnings call, Group CEO Margherita Della Valle was adamant that the operator does not believe the merger in the U.K. warrants any remedies at all.
She said the proposed transaction is very different to the recent deal in Spain, for example, where Orange and Masmovil were forced to offload spectrum assets in return for European Union merger approval.
“And the reason why it is so different … is that what we are doing in the U.K. is merging the two smaller mobile-only players which have low market shares and no returns that give them the possibility to invest appropriately in the market,” she said, according to Vodafone’s transcript of the call.
Della Valle apologized for being “very passionate about this,” but thinks it is “a very strong proposition for all stakeholders.”
She now expects the CMA process to continue “probably to the end of the year. And what we are doing now is having very intense reviews in order to address all the issues that were in the shopping list of phase one [of the CMA’s investigation], as expected.”
During the presentation of Three UK’s first quarter results for 2024, CEO Robert Finnegan also reiterated his belief that “merging with Vodafone is vital to give us the required scale to invest, grow and compete to create a best-in-class network for the U.K.”