Low Returns? Vodafone Divests Spain Business As Key Step In Right-Sizing Portfolio

Vodafone Group Plc VOD has entered into binding agreements with Zegona Communications plc to sell 100% of Vodafone Spain.

On completion, Vodafone's consideration will comprise at least €4.1 billion in cash and up to €0.9 billion in the form of Redeemable Preference Shares.

Margherita Della Valle, Chief Executive of Vodafone, said, "The sale of Vodafone Spain is a key step in right-sizing our portfolio for growth and will enable us to focus our resources in markets with sustainable structures and sufficient local scale. I would like to thank our entire team in Spain for their dedication to our customers and relentless determination to improve our organic performance. However, the market has been challenging with structurally low returns."

Zegona will fund the acquisition through a combination of new debt, Vodafone financing and a new equity raise.

Vodafone will provide a brand license agreement that permits Zegona to use the Vodafone brand in Spain for up to 10 years post-completion.

Vodafone expects the deal to have a slightly accretive effect on its adjusted earnings per share and a dilutive effect on free cash flow. The deal completion is expected to take place in the first half of 2024.

Also ReadVodafone And Intel's Ambitious Endeavor Faces The Open RAN Adoption Hurdle

Price Action: VOD shares are trading lower by 0.75% at $9.31 in premarket on the last check Tuesday.

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: EquitiesM&ANewsAsset SalesMarketsGeneralBriefsEurasia
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!