Vodafone Group PLC on Monday confirmed it is ‘exploring options with several parties’ to combine or sell its telecommunications operations in Italy.

The announcement by Vodafone followed a statement by French peer Iliad SA earlier Monday saying it has submitted a proposal to the UK company to create a new joint venture company that combines Vodafone Italia and Iliad Italia. Reuters had reported on the plans late on Friday.

Iliad said its proposal gives Vodafone Italia an enterprise value of €10.45 billion and Iliad Italia a value of €4.45 billion. Each side would receive a 50% stake in the new company, with the valuations balanced by a €6.5 billion cash payment to Vodafone, compared to just €500 million for Iliad. Both Vodafone and Iliad also would receive €2.0 billion shareholder loans.

Iliad said the merger would create ‘the most innovative telecom challenger in Italy’, with annual revenue of about €5.8 billion.

It said the proposal has the unanimous support of Iliad’s board and of its main shareholder Xavier Niel.

Vodafone back in February 2022 said it had rejected an offer for Vodafone Italia from Iliad, working at the time with private equity firm Apax Partners LLP. The Financial Times had said the offer was worth €11 billion, the same valuation for Vodafone Italia as presented by Iliad on Monday.

In response on Monday, Vodafone said it is ‘supportive of in-market consolidation in countries where it is not achieving appropriate returns on invested capital and confirms it is exploring options with several parties to achieve this in Italy, including through a merger or a disposal.’

Vodafone said there is ‘no certainty that any transaction will ultimately be agreed’.

Vodafone shares were up 6.5% at 68.84 pence in London early Monday.

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