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Vodafone Moves Closer To Exiting Italy And Spain As U.K. Deal Stalls

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Vodafone’s CEO insists that no remedies are warranted for the proposed U.K. merger. (Midjourney)

(CTN News) – Vodafone is making well in its efforts to sell its assets in Italy and Spain; however, the company’s proposal to establish a joint venture in the United Kingdom is still awaiting approval from the antitrust authorities.

The group made the announcement the previous week that the sale of Vodafone Spain to Zegona Communications had been granted final regulatory approval from the government of Spain.

It is anticipated that the transaction will be completed by the end of the month of May. On the other hand, it is projected that the operator would be given cash in the amount of €4.1 billion and redeemable preference shares in the amount of €0.9 billion.

Recent events have resulted in Swisscom obtaining partial regulatory authorization for its proposed acquisition of Vodafone Italy in Italy. It is estimated that the transaction of eight billion euros would be completed within the first quarter of the year 2025. It has been reported by the Swiss operator that the Italian Presidency of the Council of Ministers has “unconditionally approved the acquisition in accordance with the Golden Power legislation.”

This is a reference to the extraordinary jurisdiction that the Italian government possesses to limit or outright prohibit direct investments from other countries in assets that are regarded as strategic for Italy.

Swisscom admitted that the deal still awaits permission from the Italian competition authority as well as other customary approvals. These approvals include approval from the Swiss competition authority, Italy’s regulator AGCOM and MIMIT, as well as the Foreign Subsidies Regulation of the European Union.

Despite this, Vodafone is confident enough to identify its Italian and Spanish companies as discontinued operations in the report that it will submit at the conclusion of its fiscal year on March 31, 2024.

This is Vodafone’s situation in the UK

Similarly, the proposed combination of Vodafone UK and Three UK cannot be considered a successful merger. In spite of the fact that the United Kingdom government has given conditional clearance for the acquisition on the grounds of national security, the Competition and Markets Authority (CMA) has not yet determined the outcome of its complete examination.

The Competition and Markets Authority (CMA) has just made the decision to extend the inquiry period, which currently has a statutory deadline of September 18, 2024. This decision was made because CK Hutchison, the parent company of Three UK, failed to produce the necessary papers and information by May 9.

In her statement made during the most recent earnings conference for Vodafone, Group CEO Margherita Della Valle was emphatic in her claim that the operator does not consider that the merger in the United Kingdom requires any kind of remedy.

She made the statement that the proposed transaction is very different from the previous arrangement that took place in Spain, for example, in which Orange and Masmovil were required to transfer spectrum holdings in exchange for clearance from the European Union to merge.

She is quoted as saying, “The reason why it is so different is that we are merging the two smaller mobile-only players in the U.K., which have low market shares and no returns that allow them to invest appropriately in the market.”

According to Vodafone’s transcript of the call.

Despite the fact that Della Valle has expressed regret for her “extremely passionate” attitude on the issue, she continues to be convinced that it is “an exceptionally compelling proposition for all stakeholders.”

In light of this new information, she believes that the CMA process will continue “probably until the end of the year.” According to what was anticipated, we are currently carrying out exhaustive evaluations in order to remedy all of the problems that were listed on the shopping list of the first part of the investigation being conducted by the CMA.

In addition, Chief Executive Officer Robert Finnegan reaffirmed his belief that “merging with Vodafone is essential to provide us with the necessary scale to invest, grow, and compete in order to establish a best-in-class network for the United Kingdom.” This statement was made during the presentation of Three UK’s first quarter results for the year 2024.

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Salman Ahmad is a seasoned writer for CTN News, bringing a wealth of experience and expertise to the platform. With a knack for concise yet impactful storytelling, he crafts articles that captivate readers and provide valuable insights. Ahmad's writing style strikes a balance between casual and professional, making complex topics accessible without compromising depth.

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