Vodafone shares higher as Iliad proposes Italian merger
Vodafone’s share price is higher this morning after Paris-based Iliad said it has submitted a proposal to Vodafone to merge their Italian businesses.
The French company has valued the merger at €10.45 billion – and said in a statement that it would pay Vodafone €6.5 billion in cash plus an additional €2 billion in a shareholder loan to ensure long-term alignment. IGTV’s Angela Barnes has the latest.
(AI Video Summary)
Vodafone's stock on the rise
French company Iliad's suggestion to merge their Italian operations with Vodafone has caused Vodafone's stock prices to rise. Iliad's plan values the merger at €10.45 billion and involves giving Vodafone €6.5 billion in cash and a €2 billion shareholder loan. The merger would result in both companies owning 50% of the new combined business.
This news has caused Vodafone shares to increase by 6.38% for the day. However, over the course of the year, Vodafone shares have declined by roughly 18%. The merger not only offers Vodafone an opportunity to improve its performance and reverse the downward trend but also allows both companies to enhance their positions in the market and potentially benefit from working together.
A win-win situation
The valuation of the merger at a substantial €10.45 billion demonstrates the significant size of the deal. By giving both companies an equal stake in the merged business, it creates a balanced partnership, potentially leading to more efficient operations and increased competitiveness in the Italian telecommunications market. This move by Iliad could also present fresh growth opportunities for Vodafone Italia.
While the market has reacted positively to the announcement, it's important to note that Vodafone's shares have been struggling this year with a decline of about 18%. The success of the merger will depend on factors such as regulatory approval, the ability to overcome integration challenges, and how effectively the companies can take advantage of shared benefits.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
