Vodafone shares higher as Iliad proposes Italian merger

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.