Vodafone has agreed to sell its 25 percent interest in Swisscom Mobile to Swisscom for a cash consideration of CHF4.25 billion (GBP 1.8 billion). Swisscom already owns 75 percent of Swisscom Mobile. The consideration implies an Enterprise Value to EBITDA multiple of 9.1x for the financial year ending 31 March 2007. The sale is expected to close on 20 December 2006. The sale proceeds will be used to reduce Vodafone's net indebtedness. This transaction does not materially affect Vodafone's proportionate mobile revenue and EBITDA margin outlook for the financial year ending 31 March 2007. However, Vodafone will no longer receive anticipated dividends from Swisscom Mobile of approximately GBP 100 million this year and there will be a corresponding effect on the group's free cash flow outlook for the financial year ending 31 March 2007.
Vodafone and Swisscom Mobile have signed a revised long-term Partner Network Agreement in Switzerland with an initial five year term. This will enable Swisscom Mobile and Vodafone customers to continue to benefit from Vodafone's global products and services such as Vodafone live!, Blackberry from Vodafone and international roaming services, including preferred roaming arrangements. In addition, Vodafone and Swisscom will continue to co-operate in serving international corporate customers.
As a result of the transaction, Vodafone currently anticipates recording a gain on disposal of approximately GBP 100 million in its results for the year ending 31 March 2007 and will cease recording its share of the result of Swisscom Mobile from today's date.
