Vivendi to buy Voda's stake in SFR for €8b

Vivendi will buy out Vodafone's 44% stake in mobile operator SFR, after the companies agreed to a nearly €8 billion price tag. 

Vivendi said it will pay €7.95 billion for the acquisition, including a final dividend from the venture of €200 million. The purchase will give Vivendi 100% ownership of SFR. 
 
As part of the agreement, SFR and Vodafone will continue their commercial co-operation, including collaborating on cross-border services in major Western European markets, for another three years. 
 
Vodafone has revealed plans to use €4.5 billion of the proceeds to buy back shares, and the remainder to reduce debt. The operator plans to wrap up an existing share buyback program in June.  
 
The purchase price is nearly €1 billion higher than Vivendi had wanted to pay, but still well below the £8 billion (€9.06 billion) price that Vodafone had reportedly asked for. 
 
With the agreed on price representing a multiple of 6.7x calendar 2010 ebitda, it also represents a higher-than-usual valuation for telecom takeovers in developed markets, where the multiple is usually closer to 5.3x ebitda, a London-based financial analyst told Bloomberg
 
But Vivendi CEO Jean-Bernard Levy said the purchase will “create a significant increase in Vivendi's adjusted net income.”  

Vivendi has long hoped to acquire full control of SFR. In March last year, the operator flagged plans to convene talks with Vodafone over the purchase. But price remained a sticking point, despite claims the two companies were close to finalizing a deal in December.

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