Proactive Investors - Vodafone Group PLC (LON:VOD) has confirmed the sale of its Spanish business, Vodafone Spain, to Zegona Communications (LON:ZEG) for up to €5 billion.
The FTSE-100 listed telco said it would receive at least €4.1 billion in cash and up to €0.9 billion in the form of redeemable preference shares, which redeem for an amount comprising the subscription price and accrued preferential dividend, no later than six years after closing.
Margherita Della Valle, Vodafone's chief executive, said the sale “is a key step in right-sizing our portfolio for growth”.
In September, Vodafone said it was in talks with Zegona about a potential deal for the Spanish unit.
Vodafone said it would provide certain services to Vodafone Spain for a total annual service charge of around €110 million.
The deal is expected to close in the first half of 2024 and Vodafone said it would review the use of proceeds as part of a broader capital allocation review.
Vodafone and Zegona will enter into a brand licence agreement, which permits the use of the Vodafone brand in Spain for up to 10 years post-completion.
They will also enter other transitional and long-term arrangements for services including access to procurement, roaming and carrier services.