By Adria Calatayud


Swisscom said it is in advanced talks to buy Vodafone Group's Italy business for 8 billion euros ($8.68 billion), weeks after the U.K. group turned down a bid from Xavier Niel's Iliad Group.

The Swiss telecommunications company said Wednesday that it plans to merge Vodafone Italia with its Italian subsidiary Fastweb, potentially shaking up one of Europe's largest telecoms markets.

Vodafone separately confirmed the talks. The company said that after speaking with several parties to explore market consolidation in Italy, it believes a deal with Swisscom delivers the best combination of value creation, upfront cash proceeds and transaction certainty for its shareholders.

The talks signal growing appetite for mergers and acquisitions among European telecommunications companies after Orange and MasMovil last week received conditional clearance from European Union antitrust authorities for their EUR18.6 billion merger in Spain. Iliad-backed Frey earlier this week agreed to buy a stake in Swedish telecom company Tele2 from investment company Kinnevik.

For Vodafone, a potential sale would continue a yearslong effort to streamline its portfolio. Last year, the company struck a deal to sell its Spanish business to Zegona Communications for at least EUR4.1 billion.

In late January, French telecommunications company Iliad said Vodafone had rejected a revised proposal to merge their Italian businesses under which Vodafone would have received EUR6.6 billion in cash and EUR2.0 billion of shareholder loans.

Swisscom said its negotiations with Vodafone are for a full acquisition of Vodafone Italia for cash.

Vodafone said Swisscom's acquisition would be for an enterprise value of EUR8 billion on a debt- and cash-free basis and subject to customary closing adjustments

Swisscom and Vodafone separately said the price on which they agreed is preliminary and that there can be no certainty that any transaction will be completed.


Write to Adria Calatayud at adria.calatayud@wsj.com


(END) Dow Jones Newswires

02-28-24 0246ET