Vodafone sells SFR stake to Vivendi for USD11.3bn

4 Apr 2011

Paris-based media and telecoms conglomerate Vivendi has agreed to pay Vodafone Group EUR7.95 billion (USD11.31 billion) for the 44% stake in French cellco SFR that it does not already own, giving it full control of its single biggest revenue generator and cleaning up the UK group’s asset portfolio. It is understood the deal values Vodafone’s holding at EUR7.75 million, in addition to which Vodafone will receive a EUR200 million dividend from Vivendi on completion of the sale. Commenting on the deal Vivendi chief executive officer Jean-Bernard Levy said it marked a ‘turning point’ for his company. ‘This will enable us to pay a larger dividend in 2012,’ he added. Meanwhile, Vodafone said EUR4.5 billion of the net proceeds of the deal will be returned to shareholders in a share buyback scheme, with the remainder used to reduce debt. The deal is expected to close by June 2011, subject to regulatory approval.

Vodafone CEO Vittorio Colao has embarked on something of a campaign to divest non-core minority assets in a number of firms. In September 2010 it sold its 3.2% stake in China Mobile for GBP4.3 billion (USD6.93 billion) and two months later offloaded its shares in Japanese telecoms provider SoftBank Corp for USD5 billion. The latest sale has increased speculation it may divest other minority shareholdings. In particular, the industry is watching Verizon Wireless in the US where Vodafone holds a 45% stake. The holding – valued at up to USD50 billion – has not paid a dividend in more than five years, as instead Verizon Wireless has been servicing its debt. Vodafone also holds a stake in Poland’s Polkomtel and an indirect holding in India’s Bharti Airtel, both of which could be reviewed at some point in the future.

France, SFR, Vivendi, Vodafone Group