French telecoms billionaire Xavier Niel has become Vodafone's largest shareholder after acquiring a 16% stake worth £4.4 billion. The transaction follows the sale of Emirati telecoms group e&'s entire shareholding in Vodafone, which it had held since 2022.
Details of the Deal
On Friday, e& announced the sale of its stake at 112.5 pence per share, a price that represented a 15% premium over Vodafone's closing share price on Thursday. Niel, the founder of telecoms company Iliad, purchased the stake through his family investment vehicle, Vega, which was established specifically to hold this investment. Vega intends to be a long-term minority shareholder in Vodafone, according to Niel.
The Emirati group had first taken a stake worth £3.3 billion in Vodafone in 2022. e& had one seat on Vodafone's board and the right to nominate a second if its shareholding exceeded 20%, but Niel does not currently have board representation.
Vodafone's Recent Restructuring
In recent years, Vodafone has undergone significant restructuring, including selling its Italian and Spanish operations, divesting its 50% stake in its Dutch joint venture, and merging with Three to create the UK's largest mobile operator. In May, Vodafone announced it would acquire CK Hutchison's 49% stake in their VodafoneThree joint venture to take full control of the company.
Niel, who had previously sold a 2.5% stake in Vodafone through his investment vehicle Atlas Investissement in 2022, said the company now represents a "compelling investment opportunity." He stated: "As a simpler, more focused business, Vodafone is ready for a new phase of growth and is well placed to unlock substantial untapped value across its European and African operations. We are confident Vodafone can deliver sustainable growth and strong cashflow generation over the long term and – as an anchor investor based in Europe – we are ready to contribute our deep sector expertise and operational knowhow to its future success."
Niel's Track Record and Potential Impact
Niel has built telecoms businesses in France, Italy, Poland, and Iceland. According to Forbes, his net worth is estimated at $15.5 billion (£11.5 billion). His partner of more than 15 years is Delphine Arnault, daughter of France's richest man, Bernard Arnault, and an heiress to the LVMH luxury conglomerate.
Carl Murdock-Smith, a telecoms analyst at Citi, noted that Niel has a history of being an active shareholder. Months after taking a 19.8% stake for $1.3 billion in Tele2 in 2024, which made him the Swedish telecoms company's biggest shareholder, Tele2 announced it was cutting 15% of its workforce. Murdock-Smith said in a note to clients: "We believe investors will look to what happened at Tele2 after a Niel investment vehicle became the largest shareholder – such as a 15% workforce reduction plan – as a potential framework of what to expect. Investors will be interested to see what level of board representation is requested by Mr Niel."
Niel's Spokesperson Comments
A spokesperson for Niel said the transaction on Friday was only a share purchase, with no governance package attached. The spokesperson added: "As a significant long-term shareholder, assuming regulatory approvals are obtained, we would expect an appropriate level of engagement with the company over time."
Other Business Interests
Niel's other business interests include the French newspaper Le Monde, which he saved from bankruptcy. However, two years ago, he sold almost all of his shares for €1 to the Fund for Press Independence in a restructure to safeguard the publication's independence.
Shares in Vodafone jumped 12% on Friday following the announcement.
