Vodafone nets £1.8bn from phone stake
Mobile phone giant Vodafone said today it had agreed to sell its 25% stake in Switzerland’s leading operator Swisscom Mobile for £1.8bn (€2.7bn).
The Newbury-based company said the sale would not “materially affect” its mobile revenues outlook for the year, while the proceeds will be used to reduce debts.
Vodafone also explained it expects to post a gain of around £100m (€194m) in its full-year results to March 31 2007 following the sale.
Chief executive Arun Sarin said: “We do not see ourselves as the most appropriate holder of this minority stake in the longer term.
“Swisscom is keen to increase its holding in Swisscom Mobile to drive through synergies in its fixed and mobile businesses. It therefore makes sense to sell our stake now for an attractive price.”
Vodafone bought its share in Swisscom Mobile in January 2001 for £1.8bn (€2.7bn) and has since earned around £700m (€1.04bn) in dividend payments.
Swisscom holds the other 75% of the mobile operator, which boasts a 60% market share in Switzerland.
Mr Sarin said pressures in the competitive European zone – especially in the UK, Germany and Italy – had been offset by a strong performance in the company’s developing markets.
However, stockbroker Bear Stearns said today’s Swisscom Mobile deal was unlikely to lead to the sale of its 44% stake in France’s SFR. Vodafone also stressed it still saw France as a core European market.
Shares in Vodafone were down 1p at 144.25p today, but analysts suggested the company seemed to have banked a fair price for its stake.
Investment bank BNP Paribas said the price was “higher than expected”, while Citigroup thought it was “broadly in line with expectations”.
