The merger would reduce Italy’s mobile market from four major players to three, consolidating one of Europe’s most competitive markets

In the past few weeks, rumours have been circulating that Vodafone and Iliad have entered talks to discuss combining their Italian business units.

Now, it seems that those rumours are well founded, with further sources telling the media that French telecoms giant Iliad submitted a takeover bid to Vodafone just last week. 

The Italian mobile market is currently highly competitive, largely as a result of Iliad’s entry back in 2018. Following its launch, Iliad, owned by French billionaire Xavier Niel, and quickly undercut the competition, sparking a price war that has left operators’ profit margins slim. 

As a result, the market has been exploring consolidation options for some time, with the combination of Vodafone and Iliad potentially creating an entity with a market share of around 36%, rivalling market leader TIM. The merged company would reportedly have combined revenues of roughly €6 billion.  

It is worth noting that Iliad is now not only a mobile player, having launched fixed broadband services late last month. This would also be combined with Vodafone’s existing fixed line business, which is currently the second largest in the country with around 15.8% of the market as of last year. In the fixed broadband sector, TIM’s lead is even more pronounced, with the company having a market share of around 45%.

Vodafone boss Nick Read has been very open about his desire to see consolidation of European markets, suggesting that the UK, Spain, Italy, and Portugal were all targets for potential mergers. In fact, rumours last year suggested that the company had been in discussions to acquire Three UK, though these negotiations appear to have concluded without a deal being struck. Meanwhile in Spain, discussions surrounding the potential merger of Vodafone Spain with MasMovil have been reignited after numerous years of speculation. 

Part of this sudden push for consolidation may come as a result of Vodafone’s new activist investor, Cevian Capital, who was revealed to have taken a stake in Vodafone Group earlier this year and has reportedly been pushing for consolidation and a board-level reshuffle.  

Iliad has similarly been eyeing M&A plays the Italian market for some time, with Benedetto Levi, CEO of Iliad’s Italian unit, suggesting recently that they would consider the purchase of a rival Italian operator if the opportunity arose. 

If this takeover is agreed to, this would be the latest in a string of acquisitions by Iliad in recent years. In 2020, Iliad purchased Polish mobile player Play, following it up in 2021 with a bid for Polish fixed line operator UPC.

Meanwhile, in Italy itself, Iliad announced it would be co-investing in TIM’s FiberCop ‘last mile’ network last year, helping to accelerate the deployment of fibre-to-the-home services across Italy. 


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