Vodafone sells SFR stake to Vivendi for €7.95bn

International operator Vodafone has announced that it is to sell its 44 per cent stake in French carrier SFR to its partner in the operation, Vivendi, for €7.95bn. Vivendi will pay €7.75bn in cash, with a final dividend from SFR of €200m paid on completion of the deal. The move is the latest in a planned series of divestments as Vodafone exits markets in which it does not have majority ownership.

Since September last year Vodafone has unloaded its stakes in China Mobile and Japanese player Softbank.The sale of Polish carrier Polkomtel, in which Vodafone holds a stake of just under 25 per cent, meanwhile, is ongoing. With the SFR stake now also to be jettisoned, the ever-present speculation over the future of Vodafone’s participation in Verizon Wireless, where it holds 45 per cent, will doubtless intensify.

Ovum analyst Emeka Obiodu said it was “surprising” that Vodafone had commanded such a high price for its holding in SFR. “At £6.8 billion, the price is noticeably higher than what Vivendi was reportedly prepared to pay. Several years ago, the balance of probabilities favoured Vodafone to take over SFR. By 2010, a shift in focus at Vivendi, and Vodafone’s unwillingness to hang onto minority stakes made a deal possible. Vivendi may have thus paid the price to push through the deal during this window in Vodafone’s strategic repositioning.”

Vodafone will use the sale to return €4.5bn to its shareholders through a share buyback.SFR will become a partner operator to Vodafone, allowing the UK-headquartered carrier to maintain consistent offerings to roaming customers. The deal is expected to close in the second quarter of this year.

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