Vivendi, the French media conglomerate, announced on Sunday that it had taken full control of SFR, a large cellphone service provider, buying Vodafone’s 44 percent stake in the company for $11.3 billion in cash.þþThe deal gives Vivendi full control of one of its biggest business units, a longtime goal for the company. SFR is one of the biggest cellphone carriers in France. It earned nearly 4 billion euros in profit last year and had about 20 million mobile service customers as of Sept. 1.þþVivendi made no secret of its desire to take control of SFR and had suggested that it would use cash it received from the sale of its stake in NBC Universal to pursue a deal with Vodafone. Vivendi said it would use the additional income it expects from the purchase to raise its dividend.þþ“We are very pleased to reach our strategic objective to own 100 percent of SFR, which will help Vivendi to focus further on profitable growth and innovation,” Jean-Bernard Lévy, Vivendi’s chairman and chief executive, said in a statement. þþThe deal is also the latest move by Vodafone in recent months to sell minority holdings it owns in countries around the world. Vodafone, based in Britain, has already agreed to sell its 3.2 percent stake in China Mobile for $6.6 billion. Analysts and investors continue to speculate about its plans for the 45 percent stake it owns in Verizon Wireless.þþ“Our board remains committed to realizing maximum value from our noncontrolled assets,” Vittorio Colao, Vodafone’s chief executive, said in a statement. “The sale of our stake in SFR, at an attractive multiple, represents a significant further step in the execution of this strategy.”þþUnder the terms of the deal, Vivendi will pay 7.75 billion euros for Vodafone’s minority stake in SFR, and will give Vodafone an additional dividend payment of 200 million euros.þþ(Vodafone’s stake in the company brought in about £573 million, or about $920 million, in adjusted operating profit for the first quarter this year.)þþVodafone and SFR also agreed to a commercial partnership, including a roaming service agreement, for an additional three years.þþVodafone plans to use proceeds from the deal to buy back £4 billion worth of its own shares, bolstering an existing stock buyback plan, and to reduce its debt.þþThe deal is expected to close in the second quarter.þþVivendi was advised by Rothschild, while Vodafone was advised by Lazard.þ
Source: NY Times
