Vodafone is in talks to sell its Italian arm of the company to Swiss telecommunications firm, Swisscom, for £6.8bn.

The telecoms group said it has "engaged extensively with several parties to explore market consolidation in Italy", believing that a transaction with Swisscom "delivers the best combination of value creation, upfront cash proceeds and transaction certainty for Vodafone shareholders".

The move comes after the firm sold its Spanish operation to Zegona Communications for £4.37bn in October 2023 and announced a potential merger with Three, which is currently under investigation by the Competition and Markets Authority.

This is in line with the plan set out by Vodafone chief executive officer, Margherita Della Valle, which aimed to tackle three markets that made no return on its respective capital.

Investment director at AJ Bell, Russ Mould, commented: "Vodafone came to the rescue after its shares jumped on talks to potentially sell its Italian operations. The telecoms group has been stuck in the mud for a long time, trying to revive growth and reignite a spark in the business.

"Work to streamline the group has already involved various deals but the market is still not convinced Vodafone has found the magic solution judging by its share price performance over the past five years. The Italian deal, if successful, is a step in the right direction but only one small piece of the puzzle."

Vodafone has said that there can be no certainty that any transaction will be ultimately agreed and that a further announcement will be made when appropriate.

Reuters reported that following this announcement, shares in Vodafone increased by 1%, with shares in Swisscom decreasing by 0.5%.

Head of money and markets at Hargreaves Lansdown, Susannah Streeter, added: "Vodafone shares lifted in early trade as it confirmed it’s in advanced discussions with Swisscom about the sale of its Italian arm. This is part of Vodafone’s evolving strategy to improve its performance against its peers.

"The deal would follow hot on the heels of the sale of its Spanish division. But low sales growth relative to spending is still set to weigh on the company even as it offloads underperforming divisions."

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