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Swisscom acquires Vodafone Italia, starting the union with Fastweb

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Swisscom acquires Vodafone Italia, starting the union with Fastweb

The never-ending history of TLC in Italy

Fastweb and Vodafone Italia have always been betrothed in the Italian telecommunications market. With today’s announcement we arrive at “The End” (the first, awaiting the closing next year), of a plot that is reversed compared to the scheme long imagined in recent years, with a Vodafone as the hunter and a Fastweb as the prey . All on the basis of a valuation, net of debt and cash, of 8 billion, which in terms of enterprise value, explains Vodafone itself in a note, means an offer with a multiple of 7.6 times the adjusted Ebitdaal calculated on consensus FY 2024.

Synergies of 600 million annual run rates are expected and the acquisition, Swisscom specifies, «will be entirely debt financed, increasing Swisscom’s financial leverage to 2.6x (net debt/EBITDA) at the end of 2025, while maintaining a solid balance sheet . Swisscom expects to maintain an ‘A’ corporate credit rating, one of the highest among European companies in the telecommunications sector, supported by a clear deleveraging path.”

First big in Ftth fiber

What is being created in Italy, Mediobanca Research had highlighted in recent days, is a big company with 7.3 billion euros in revenues (between 2.6 for Fastweb and 4.7 expected for Vodafone Italia), with 33 million SIM on mobile: 32% of the market (but this figure also includes “machine-to-machine” SIMs, used to make machines “speak” in industrial uses or in home automation. In landline it will have 34.7% of market share in FTTC fiber and will also be the first player in FTTH fiber with a combined market share of 36 percent. Italy is the third market for Vodafone (after Germany and the UK) and accounts for 11% of revenues from services of the group.

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Revenues from services in 2023 fell to 4.25 billion (-2.9%). As for Fastweb, they increased by 6.1% to 2.6 billion. An operation born with the goad of Iliad behind it, which in January presented (rejected) an offer for a joint venture. A nit that is not exactly declassifiable, given that the founder and main shareholder of Iliad, Xavier Niel, is a shareholder with 2.5% of the same Vodafone Group and that the CEO’s predecessor, Nick Read, lost his seat due to the lack of reactivity to the request from shareholders to put their shareholdings in order. Also for this reason the communication of an operation between Vodafone and Fastweb was awaited, in the knowledge that CEO Della Valle could not delay much longer in giving a signal to its stakeholders.

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