Vodafone exits China Mobile

Huawei and Telenor sign an international deal

Two of the world’s biggest operators – Vodafone and China Mobile – announced their financial separation on Wednesday, marking the start of Vodafone’s abandonment of its minority investments.

UK-based Vodafone announced the sale of its entire 3.2 per cent interest in China Mobile, for a cash consideration of around £4.3bn before tax and other costs. Approximately 70 per cent of the net proceeds will be returned to shareholders by way of a share buyback with the remainder used to reduce the group’s net debt.

Vodafone had owned a stake in the leading Chinese carrier since 2000, following a cooperation agreement between the two companies. In an announcement today, Vodafone said it would continue with its commercial and technology cooperation with China Mobile in areas such as roaming, network roadmap development, multinational customers and green technology.

Vittorio Colao, chief executive of Vodafone said the move was in line with his stated portfolio strategy, suggesting that other minority disposals may be on the horizon. It’s understood that holdings in Poland’s Polkomtel and France’s SFR may also be up for sale, and there is of course the controversial question of the 45 per cent stake in US carrier Verizon Wireless that rears its head on a frequent basis.

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