VODAFONE, the world’s largest telecommunications operator by revenue, has sold its 3.2 per cent stake in China Mobile for $6.6bn (£4.3bn).
The sale was part of Vodafone’s new strategy to exit non-strategic minority investments, which analysts and investors believe have weighed on the company’s overall value in recent years.
Vodafone said UBS, Goldman Sachs and Morgan Stanley were handling the placing, managed by corporate adviser Rothschild, and around 70 per cent of the net proceeds would be returned to shareholders via a buyback, while the remainder would be used to pay down debt.
Vodafone chief executive Vittorio Colao has said the group’s minority holdings are not considered essential and it would focus on its core markets in Europe, Africa and India instead.“Today’s transaction achieves a near doubling of Vodafone’s original investment in China Mobile and combines our stated portfolio strategy with ongoing cooperation with China’s leading telecommunications company,” said Colao.
The two groups said they would continue to work together on issues such as roaming and research.
After buying into China Mobile in 2000, Vodafone increased its stake in 2002, paying a total of $3.25bn.
At Vodafone’s AGM in July, some shareholders criticised its chairman, Sir John Bond, for the company’s “disastrous” acquisition record.
City A.M. Reporter