Vodafone UK deal seen as value-accretive but Citi expects buyback pause Proactive uses images sourced from Shutterstock
Vodafone Group PLC’s (LSE:VOD) move to take full control of its UK joint venture has been broadly welcomed by analysts, with questions remaining over how it will affect capital returns.
The FTSE 100 telecoms group yesterday said it had agreed to buy CK Hutchison’s 49% stake in VodafoneThree for £4.3 billion, valuing the business at £13.85 billion including debt.
Analysts said the price looks attractive relative to earlier expectations embedded in the merger structure.
Deutsche Bank said the deal accelerates Vodafone’s strategy, bringing forward full ownership of the UK business “sooner than expected” and giving it full exposure to cost savings.
Analyst Robert Grindle highlighted more than £700 million of annual synergies expected by the end of the decade, with integration already progressing ahead of schedule.
Citi said the valuation “will be seen as positive” for the UK group, noting it comes below the £16.5 billion level implied in earlier put and call options.
However, Citi also flagged a likely trade-off, believing that the announcement “suggests that Vodafone will not continue its buyback into 2026/27”, where it has been forecasting around €1 billion of shares would have been bought back.