iliad S.A. has offered UK mobile telecom operations of domestic telecoms group Vodafone Group Public Limited Company (LSE:VOD) to merge the two companies? operations in Italy. The offer proposes an enterprise value for Vodafone Italia of EUR 10.45 billion.

Under the terms, Vodafone would get 50% of the share capital of the new company (NewCo), together with a EUR 6.5 billion cash payment and a EUR 2.0 billion shareholder loan to ensure long-term alignment, Iliad said in a press release. As part of the transaction, Iliad would have a call option on Vodafone?s equity stake in the NewCo and would be able to acquire a block of 10% of the share capital every year at a price per share equal to the equity value at closing. If Iliad would choose to exercise the call options in full, this would generate an additional EUR 1.95 billion in cash for Vodafone.