Last year, Xavier Niel’s personal holding allowed the Iliad group to make a first breakthrough. On behalf of the parent company of the French operator Free, its boss and billionaire spent 860 million euros to buy 2.5% of Vodafone, the fourth operator in the world by number of subscribers. A major operation, but which above all hid the failure of a much larger takeover attempt, in February 2022, for an amount of more than 11 billion euros. Iliad wanted to grab 100% of the shares of the Italian subsidiary of Vodafone, without success.
In April 2023, more than a year later, discussions resumed. Sources close to the matter confirmed this to Bloomberg, while indicating that an imminent transaction was not planned. On the other hand, the European deployment strategy still seems relevant. Vodafone is weakened, Xavier Niel is now its fourth largest shareholder… and it is therefore a clearer horizon that seems to present itself to find common ground. Free wants to enter the top 3 of European operators and intends to give itself the means.
To hope to reach it, the company pursues both its internal development abroad, while remaining attentive to sales files. Vodafone may be a juggernaut, but this period in the aftermath of monster investments in 5G has made the British giant more fragile, in search of refocusing on its main markets. It is still the third largest telecommunications player in the world and its smallest subsidiary or geographical area of activity sold is worth gold today, in view of the number of subscribers and international coverage.
Iliad: 46 million subscribers
Free, for its part, is present in France, Italy, Morocco and Poland. Is its goal with Vodafone confined to Italy, in the event of merging its activities? The question is difficult, perhaps other buyout opportunities in Vodafone’s assets would also be plausible. In any case, the rumor of the resumption of negotiations was greatly welcomed on the financial markets in London on Wednesday, with a price up 3.3% for Vodafone, to 32 billion dollars of capitalization, its biggest increase of these last two months.
Iliad, for its part, is currently the sixth largest telecommunications group in Europe, with 46 million subscribers in its various subsidiaries. Last March, during the publication of its 2022 annual report, the group revealed a net profit of 758 million euros, up by more than 44% and with an increase in the number of subscribers of 2.4 million on the ‘year. “If ever there is a consolidation movement in Italy, we want to be part of it”, recalled at this time Thomas Reynaud, the group’s general manager. A rather clear reminder of his intentions with Vodafone.
