Vodafone deals signal change

Chief
executive Vittorio Colao has been spring cleaning with a will at Vodafone.

The
latest puff of dust is a deal to sell a 44 per cent
stake in SFR, the
French mobile phone business, to Vivendi for $11.3billion.

This follows news that the UK telecoms company
would pay $5 billion to buy out Essar’s 33 per cent
stake in Vodafone Essar of India.

The
price agreed by Vivendi, the only other shareholder in SFR, equates
to about 6.7 times the current year’s enterprise value to earnings before
interest, tax, depreciation and amortisation.

That
is ahead of what Vivendi had signalled it might hand over, at a time when
competition is intensifying in the French market.

Mr
Colao is seen as rationalising a group that became unwieldy under the
expansionist policies of predecessor Arun Sarin.

However,
the stake in SFR dates back to the incumbency of Sir Christopher Gent,
architect of Vodafone as a global force, partly via the £112bn takeover of
Mannesmann of Germany in 2000.

 It is revisionism to imagine that Mr Colao is
any way unusual in restructuring his group to equip it for changing markets.
All chief executives face that challenge.

They vary in the extent to which they
succeed, and the jury is perforce still out on Mr Colao.

Vodafone
stressed that the recent flurry of deals was a long time in its gestation.

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