Sharecast - Iliad said the proposed merger would value Vodafone (LON:VOD) Italia at €10.45bn. Under the terms of the deal, Vodafone would obtain 50% of the share capital of the new entity, together with a €6.5bn cash payment and a €2bn shareholder loan to ensure long-term alignment.
Iliad said the merger would create "the most innovative challenger" in an Italian market with five mobile network operators and more than 10 fixed broadband providers.
It also said the merged business would be expected to generate revenues of around €5.8bn and EBITDA of approximatively €1.6bn for the year ending March 20241.
Iliad chief executive Thomas Reynaud said: "The market context in Italy calls for the creation of the most innovative telecom challenger, with ability to compete and create value in a competitive environment.
"We believe that the profiles and complementary expertise of Iliad and Vodafone in Italy would allow us to build a strong operator with the ability and financial strength to invest for the long term. NewCo would be fully committed to accelerating the country’s digital transformation and especially fiber adoption and 5G deployment, with more than €4bn of investment planned over the next five years."
Vodafone said in a separate statement that it is "supportive of in-market consolidation in countries where it is not achieving appropriate returns on invested capital".
The British telecoms firm said it is "exploring options with several parties to achieve this in Italy, including through a merger or a disposal".
It added that there can be no certainty that any transaction will ultimately be agreed.
At 1120 GMT, the shares were up 6.9% at 69.17p.
