The combined company is expected to enhance performance and user experience for clients across all market segments as well as provide B2B customers with a larger portfolio of IT and communication services and an improved one-stop-shop experience
Swisscom to merge its Italian subsidiary Fastweb with Vodafone Italia. (Credit: Marek Gehrmann/Wikimedia Commons)
Swiss telecommunications provider Swisscom has agreed to acquire Vodafone Italia, a subsidiary of Vodafone Group, in an all-cash deal worth €8bn.
Through the deal, Swisscom plans to merge its Italian subsidiary Fastweb with Vodafone Italia.
According to the Swiss company, both Italian units will bring together complementary mobile and fixed infrastructures, competencies, and capabilities to establish a dominant converged challenger in a market with material growth potential.
The combined entity will benefit from increased scale, more efficient cost structure and significant annual run-rate synergies of approximately €600m.
It will deliver significant value for all stakeholders, sustain investments in the Italian telecommunication market and provide innovative, competitively priced converged services.
The combined company will also enhance performance and user experience for clients across all market segments.
Besides, the deal will provide business-to-business (B2B) customers with a larger portfolio of IT and communication services and an improved one-stop-shop experience.
This is expected to allow faster digitalisation for enterprises and public administration in Italy.
Swisscom CEO Christoph Aeschlimann said: “Swisscom has been operating successfully in Italy since the acquisition of Fastweb in 2007. Over this period, we have built a strong track record of investment and profitable growth in Italy.
“The industrial logic of this merger is very strong. Fastweb and Vodafone Italia are an ideal fit to create high added value for all stakeholders.”
Following the completion of the deal, both parties will sign several transitional and long-term service agreements.
This will include a brand licence agreement, allowing the use of the Vodafone brand in Italy for up to five years post the closing of the transaction.
Vodafone will also provide certain services for an initial total annual service charge of nearly €350m, which is expected to decrease over time.
Furthermore, Swisscom and Vodafone Group are seeking a closer commercial relationship to enable collaboration across various fields beyond Italy.
The key areas of commercial collaboration include Internet of Things (IoT), procurement, enterprise services and solutions, operational shared services, and roaming.
Vodafone Group CEO Margherita Valle said: “By bringing together Vodafone Italia and Fastweb, we are enabling the creation of a strong converged telco, well positioned to compete in the Italian market.
“And we are opening the opportunity to establish a broader commercial partnership between Swisscom and Vodafone.”
Subject to regulatory and other customary approvals, the transaction is expected to be completed in Q1 2025.