EU gives Swisscom green light for takeover of Vodafone Italia

The approval marks another important step toward obtaining the authorizations Swisscom needs to finalize the transaction, the Swiss telecommunications group announced in a press release on Tuesday. Swisscom submitted its acquisition plans to the European Commission’s Directorate-General for Competition on August 19.

On Monday, the European Commission announced that its preliminary review had been completed and that the transaction could therefore proceed without reservation. «Overall, the acquisition of Vodafone Italia is proceeding according to plan,» Swisscom added.

Potential Threat to Competition

However, the proceedings in Italy are still pending. Two weeks ago, the Italian competition authority, AGCM, announced that it would take a closer look at the planned deal. The Italian antitrust regulators have launched an in-depth review (Phase II).

Last week, the Autorità Garante della Concorrenza e del Mercato (AGCM) then voiced criticism: In a report, it referred to a potential threat to competition.

According to competition regulators, the transaction would create a company with dominant market power in fixed-line services for residential and business customers as well as government agencies.

The report goes on to state that the authority also took particular account of comments from competitors such as Open Fiber, TIM (Telecom Italia Mobile), Poste Italiane, Fibercop, Iliad Italia, and Retelit. Among other things, these companies commented on the allocation of spectrum for mobile services and access to the physical mobile network infrastructure.

According to feedback from competitors, Vodafone Italia also holds a dominant position in the mobile roaming market. Vodafone Italia's market share is about 10 percent higher than that of its main competitor, Telecom Italia Mobile (TIM).

Swisscom Sticks to Its Schedule

Meanwhile, Swisscom is sticking to its original timeline. «As announced on March 15, 2024, Swisscom expects the transaction to be completed in the first quarter of 2025,» the company wrote on Tuesday.

Last week, a spokesperson stated that «Swisscom remains convinced that the transaction will promote competition.» The telecommunications group will work «closely and constructively» with the Italian competition authority to secure approval as soon as possible.

Future number two

The «Blue Giant» had announced its plans to acquire Vodafone Italia in late February. The purchase agreement was then signed in mid-March. From the Federal Council’s perspective, all conditions for the acquisition had been met.

Vodafone Italia is to be merged with the Swisscom subsidiary Fastweb. Fastweb boss Walter Renna has been appointed as the new head of the joint company in Italy.

Vodafone Italy and Fastweb complement each other well: while Fastweb has a broadband network, Vodafone Italy contributes a mobile network. The merger of Fastweb and Vodafone Italy is expected to generate synergies of EUR 600 million per year from 2029, according to earlier statements.

According to information available at the time, this would create Italy’s second-largest telecommunications provider—behind the market leader TIM—with combined revenue of 7.3 billion euros and combined earnings before interest, taxes, depreciation, and amortization (EBITDA) of 2.4 billion euros. (SDA/swi)