Vodafone sells stake in operator SFR to Vivendi
- 04 April, 2011 18:26
Vivendi will acquire Vodafone’s 44 percent stake in the French telecommunications company, Société Française du Radiotéléphone (SFR), for €7.95 billion euros (US$11.3 billion), giving it full ownership of SFR.
The agreement, announced on Friday, comes after months of talks and reflects Vodafone’s strategy to divest companies that it does not have management control over.
Vodafone said on Monday that its board remains committed to realizing maximum value from non-controlled assets. The company said it will return £4 billion (US$6 billion) of the net proceeds to its shareholders through a share buy back, with the rest used to reduce the group’s net debt.
Vodafone's SFR holdings contributed £573 million to Vodafone's adjusted operating profit for the financial year ending March 31, 2010, and £284 million in the six months up to Sept. 30, 2010, the company said.
Vivendi, a large media company, has investments in telecommunications companies in France, Morocco and Brazil.
SRF and Vodafone will also have a partnership in France for the next three years. Vodafone said the partnership will allow it to “continue to deliver compelling cross-border services to both consumer and enterprise customers across the major markets of western Europe."
Last year, Vodafone sold its 3.2 percent stake in China Mobile, and also divested its stake in Softbank in Japan.
But the company continues to invest in some markets such as India where it said last week that it will pay $5 billion to buy out the 33 percent stake held by its Indian joint venture partner, Vodafone Essar. The company had taken a £2.3 billion charge last year for its earlier investment in the joint venture, citing fierce price competition in the Indian market.