Vodafone Sets Sights on Fastweb, Kabel Deutschland ahead of Verizon Wireless Divestment

Michael Teague |

VodafoneA day after it was announced that British wireless giant Vodafone (VOD) had approached German cable company Kabel Deutschland with a buyout offer potentially worth more than $10 billion, reports on Thursday indicated that the company was also weighing an attempted purchase of Swisscom AG’s Fastweb land-line and internet assets in Italy.

With a market cap of $148 billion, Vodafone is the world’s second largest wireless company, and while its primary focus is said to be the Kabel acquisition, the Fastweb deal would provide access to 1.9 million customers for a company whose worth is estimates at nearly $4 billion.

Since Fastweb was acquired by Swisscom in 2007, the company has struggled, especially with increased competition in Italy as well as an ill-stricken Eurozone economy. All the same, the company has been successful in many of its efforts, doubling net customer gains from 2011 to 2012, and joining a partnership with Sky Italia Srl to bundle television and broadband services.

In 2012, the company paired with Telecom Italia (TI) to build out Italy’s broadband infrastructure.

Vodafone has twice approached Swisscom over a deal for Fastweb, most recently earlier this year, and has been turned away both times. The company’s taste for acquisitions is being fueled by its upcoming divestment from its partnership with Verizon Communications (VZ) in the U.S.’s largest wireless provider, Verizon Wireless. Verizon is looking to end the partnership and take control of Vodafone’s 45 percent stake in the operation.

Vodafone, for its part, stands to collect more than $100 billion from the deal, which certainly gives it the flexibility to make purchases to supplement the loss of Verizon Wireless.

Towards the end of regular trading, shares for Vodafone were up half a percentage point to $28.25.

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Symbol Name Price Change % Volume
TI Telecom Italia S.P.A. New 8.35 0.10 1.21 55,175
VOD Vodafone Group Plc 27.77 -0.05 -0.18 3,569,905
VSH Vishay Intertechnology Inc. 14.02 0.02 0.14 365,254
VZ Verizon Communications Inc. 48.20 -0.94 -1.91 24,784,972


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