Vodafone rejects (again) the merger proposed by Iliad in Italy

Vodafone once again refuses Iliad. Already approached in 2022 by Xavier Niel's group, the British telecoms giant is once again rejecting the advances of the French group, which had expressed its desire in mid-December to merge the Italian activities of the two groups. “We stated in December that we were exploring options with several parties in Italy. We are no longer in talks with Iliad,” Vodafone confirms to Le Figaro. It was Iliad who was the first to announce the decision of its counterpart Vodafone this Wednesday morning in a press release. He maintains that “the merger of these two companies would provide, by far, the best solution” to “support the Italian telecommunications sector”.

Xavier Niel and his teams believe that their second offer was generous. Valuing Vodafone's activities at 10.45 billion euros, this proposal was compared to that of 11.25 billion euros submitted in February 2022. Indeed, the operating result of the British giant deteriorated between time.

The new entity resulting from the merger would have achieved a turnover of approximately 5.8 billion euros, and an operating profit of 1.6 billion euros for the financial year ending in March 2024. market shares, it would have consolidated the place already occupied by Vodafone as the second operator in the country, behind Telecom Italia. When the stock markets opened, the British group lost almost 3%. Under the leadership of its new general manager, Margherita Della Valle, Vodafone has promised a vast portfolio review to refocus on these flagship markets after a series of poor results.

For its part, Iliad “takes note of this decision” and intends to “continue its current strategy” in Italy. In the space of a few years, thanks to an aggressive strategy aimed at cutting prices, Iliad has established itself as the most active player in recruiting fixed and mobile subscribers. Iliad also explains that it will “continue its offensive strategy in terms of market share gains in all segments”.

Xavier Niel was not the only candidate lined up on the starting line. The Fastweb group, a subsidiary of the operator Swisscom, also has its sights set on Vodafone Italia with a view to a merger there. According to Bloomberg, this operator came forward in the fall. Contacted by us, Vodafone specifies that “discussions with other parties are continuing”. It must be said that in Italy, the market is relatively fragmented on mobile but also on landlines. A breakup which makes the competitive game between the different players even more intense, and puts pressure on their margins.