By Ian Walker

Shares of Vodafone Group rose 4.6% after Iliad Group said that it has put forward a proposal to the company to merge their Italian businesses in a deal that values Vodafone Italia at 10.45 billion euros ($11.38 billion).

The European telecom company said Monday that it is planning to create a new company jointly owned with Vodafone that will combine their Italian businesses.

Iliad said the proposal has the support of its board and main shareholder Xavier Niel. Vodafone hasn't issued any statement on the deal, and didn't immediately respond when approached by Dow Jones Newswires for comment.

Under the proposal, Vodafone would get EUR6.5 billion in cash and a EUR2.0 billion shareholder loan. Vodafone's share of the new business would be worth EUR1.95 billion, Iliad said.

Iliad said it would get EUR500 million in cash and a EUR2.0 billion shareholder loan. It would also have the option to buy 10% of the joint venture from Vodafone every year at an agreed price at the time.

The merged business is expected to generate revenue of EUR5.8 billion and earnings before interest, taxes, depreciation and amortization after leases of EUR1.6 billion for the fiscal year ending March 2024.

At 0830 GMT, Vodafone shares were up 3.0 pence at 67.72 pence, but are down 20% over the year to date.

Write to Ian Walker at ian.walker@wsj.com

(END) Dow Jones Newswires

December 18, 2023 03:47 ET (08:47 GMT)

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