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Vodafone stock (NASDAQ:VOD) rose more than 5% out of Friday's market open, leading Communications stocks, as the company confirmed the sale of its Italian unit for €8B, much of which it's returning to shareholders.
In a filing, Vodafone (VOD) announced a binding deal to sell 100% of Vodafone Italy to Switzerland telecom Swisscom for €8B (about $8.71B) in up-front cash.
"Today, I am announcing the third and final step in the reshaping of our European operations," said Vodafone group CEO Margherita Della Valle. "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."
"Our transactions in Italy and Spain will deliver €12B of up-front cash proceeds and we intend to return €4B to shareholders via buybacks, as part of our broader capital allocation review," she added.
The deal comes just a couple of weeks after renewed chatter that a transaction was being discussed with Swisscom, which prevailed over rival overtures from billionaire Xavier Niel's Iliad (whose latest offer of a 50/50 joint venture was rejected in January).
Swisscom operates Italy's second-biggest telecom, Fastweb, and will combine those operations with Vodafone Italy.