Vodafone Shakeup Likely After Increased Interest from French Investor

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French billionaire Xavier Niel recently acquired a 2.5 percent stake in the U.K.-based mobile network operator, Vodafone Group, through his investment vehicle Atlas Investissement, indicating his intent to shake up the business by supporting the MNO’s bid to pursue consolidation, according to Mobile World Live. In a statement, Atlas explained it identified Vodafone as an attractive investment opportunity in terms of the quality of its asset portfolio. The firm said it sees a way to accelerate a streamlining of Vodafone’s European footprint and to sell off infrastructure assets.

Niel’s investment vehicle added it supported Vodafone’s publicly stated intention to seek consolidation opportunities with other MNOs in selected geographies. Moreover, Atlas believes it can help Vodafone further reduce operating costs, improve profitability, accelerate broadband development in Germany, Vodafone’s primary market, and focus on innovation. The price Niel paid for the Vodafone stake is estimated at just under $750 million. 

Niel has a big presence across European and African telecom markets, with investments in MNOs in nine countries, serving nearly 50 million subscribers combined and generating roughly $10 billion in annual revenue. 

Atlas is separate from Iliad Group, the French operator that Niel owns. Iliad Group also has a presence in Italy and Poland. In February, Vodafone rejected an $11 billion bid from the billionaire for its Italian business, as Niel sought to boost Iliad’s presence in Italy.

Vodafone is under pressure to conduct a shake-up, after it came to light that activist investor Cevian Capital had built up an undisclosed stake and was calling for an overhaul. Nick Read, Vodafone CEO, has also said the company wants to sell a big stake in Vodafone’s infrastructure unit, Vantage Towers, as Inside Towers reported.

On a comparative note, fellow French billionaire Patrick Drahi has also established a major presence in the U.K. telecom market, building up an 18 percent stake in BT Group, a big Vodafone competitor.

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