As part of the deal, Vodafone will continue to supply certain services to Swisscom for up to five years.
With the sale of Vodafone Italy and Vodafone Spain, together with the merger of Vodafone UK and Three UK, Vodafone says it will now focus its operations in Europe on growing markets, where it holds strong positions with good local scale.
Three’s deal with Vodafone remains subject to regulatory approval from the UK’s Competitions and Markets Authority.
Della Valle said on Friday that she had previously made clear that repositioning Vodafone would “not be a quick fix”.
In an investor update she said: “Today, I am announcing the third and final step in the reshaping of our European operations. Going forward, our businesses will be operating in growing telco markets - where we hold strong positions - enabling us to deliver predictable, stronger growth in Europe.
“The sale of Vodafone Italy to Swisscom creates significant value for Vodafone and ensures the business maintains its leading position in Italy, which has been built through the dedicated commitment of our colleagues to serving our customers over many years.
“Our transactions in Italy and Spain will deliver €12 billion of upfront cash proceeds and we intend to return €4 billion to shareholders via buybacks, as part of our broader capital allocation review," Della Valle said.
Swisscom, meanwhile, said it intended to merge Vodafone Italy with Fastweb, its own Italian subsidiary which would create a leading converged challenger in the market. Fastweb has grown by over 50% in terms of customers and revenue over the past 10 years.
Christoph Aeschlimann, CEO of Swisscom said: “Swisscom has been operating successfully in Italy since the acquisition of Fastweb in 2007.
“Over this period, we have built a strong track record of investment and profitable growth in Italy. The industrial logic of this merger is very strong. Fastweb and Vodafone Italia are an ideal fit to create high added value for all stakeholders.
“As a result, private and business customers will benefit from the most comprehensive offer. Swisscom will also be strengthened as a whole, allowing us to continue making significant investments in the Swiss and Italian market.”
