Vodafone bought the holding at the top of the market in 2001 for CHF 4.5bn ($3.66bn) and is now likely to face a loss of the deal as bankers Bear Stearns values the stake now at 3.63 billion Swiss francs ($2.9bn).
Swisscom said the aim of the move was to secure financial advantages, optimize its balance-sheet structure, and improve its position in terms of converged offerings.
It resells the Vodafone live! service, and uses the Newbury, UK-based company’s purchasing muscle to secure deals on equipment. Swisscom said the successful strategic partnership with Vodafone would continue on the basis of a commercial agreement.
Swisscom was thwarted by the Swiss government in its ambition earlier this year to buy Irish incumbent Eircom Group Plc. The government was concerned about it taking on extra debt ahead of privatization.
However, it said that the Swiss Federal Council had decided that if it was to buy back Vodafone’s 25% stake, this would not be taken into account in the net-debt limit set out in the government’s strategic goals. Swisscom said that if the transaction goes ahead, its net-debt limit would remain unchanged at 1.5 times EBITDA, guaranteeing a high level of strategic flexibility.
Vodafone has so far this year sold its Japanese unit, Vodafone KK, to Softbank for JPY 1.8 trillion ($15.5bn), parted with its 25% stake in leading Belgian mobile operator, Proximus for 2bn euros ($2.55bn), and disposed of its loss-making Swedish operation Europolitan Vodafone AB for 994m euros ($1.2bn).
