e& to Sell Entire Vodafone Stake to Niel Family in $5.95 Billion Deal

UAE technology and telecommunications group e& has agreed to sell its entire stake in Vodafone Group for approximately $5.95 billion (AED 21.8 billion). The transaction covers nearly 3.95 billion ordinary Vodafone shares, equivalent to about 16.21% of the British company’s issued share capital and 17.13% of its voting rights.

The stake will be acquired by Vega, a purpose-built investment vehicle indirectly owned by the family group of French telecom entrepreneur Xavier Niel. According to Vega’s announcement, the investment is intended to be a long-term strategic minority holding. Once the transaction is completed, the Niel family group is expected to replace e& as Vodafone’s largest shareholder.

Under the agreement, e& will receive approximately 110.5 pence in cash for each Vodafone share, along with Vodafone’s final fiscal 2026 dividend. The combined consideration is about 112.5 pence per share. e& said the total package represented a 13% premium to Vodafone’s market price and would produce a net cash return of approximately $1.3 billion (AED 4.7 billion).

The exit follows what e& described as a comprehensive review of its international investment portfolio. Alongside the sale agreement, the group terminated its formal relationship agreement with Vodafone, while e& Group CEO Hatem Dowidar stepped down from his position as a non-executive director on Vodafone’s board.

A Stake that Grew from 9.8% To 16.21%

E& entered Vodafone’s shareholder register in May 2022, when the company, then transitioning from the Etisalat name, acquired an initial 9.8% holding. That purchase involved roughly 2.77 billion shares and was valued at approximately $4.4 billion at the time.

The investment was originally presented as a way to gain exposure to a major international connectivity and digital-services company. E& said Vodafone’s footprint, business-to-business operations, Internet of Things capabilities and presence across Europe and Africa made it an attractive strategic investment. Its initial announcement also described the group as a supportive, long-term shareholder that did not intend to seek control of Vodafone.

Over the following years, e& progressively expanded its position. Its holding rose to 11% in late 2022, reached about 14.57% by March 2023 and eventually climbed above 16%. A strategic relationship agreement signed in 2023 gave e& the right to nominate a non-executive director to Vodafone’s board, deepening a relationship that had begun as a largely financial investment.

The latest agreement reverses that expansion. E& said it no longer seeks to exercise influence over Vodafone’s board or management, although it left open the possibility of future commercial cooperation. Cash released through the sale is expected to give the Abu Dhabi-listed group greater flexibility to concentrate resources on its core businesses and other growth priorities.

Vega Positions Itself as a Long-Term Shareholder

Vega said it was created specifically to hold the Vodafone shares and would be financed by Niel and participating financial institutions. The acquisition will have no recourse to, or effect on the leverage of, other companies controlled by the Niel family group.

Niel is the founder of French telecommunications group Iliad and has built an extensive portfolio of telecom investments across Europe and other markets. Vega said his family group’s experience developing communications businesses would allow it to serve as a committed and supportive shareholder. Niel described Vodafone as an attractive investment supported by recognized brands, established market positions and operations spanning Europe and Africa.

Vodafone publicly welcomed the change. The company said it knew the Niel family group well and expected to engage with it as a supportive, long-term investor. The statement provides an important counterpoint to speculation about what Niel may seek from the company: neither Vodafone nor Vega announced a board appointment, operational mandate or agreement giving Vega direct governance rights.

The ownership shift arrives after Vodafone spent several years simplifying its portfolio and concentrating on fewer markets. Under Chief Executive Margherita Della Valle, the group has exited businesses including Spain and Italy and completed the combination of Vodafone UK with Three UK. Vega said those changes had created a more focused company with the potential to unlock additional value across its European and African operations.

Completion Still Depends on Regulatory Requirements

The transaction is structured through simultaneous off-market block trades involving three financial institutions. Those institutions will initially hold the shares while Vega completes applicable regulatory procedures, including the approvals needed to assume the full position.

E& expects to receive the sale proceeds once the shares have been transferred to the financial institutions. Its final fiscal 2026 Vodafone dividend, worth approximately 2.02 pence per share under e&’s announcement, is due on July 30, 2026 and is included in the reported $5.95 billion transaction value.

The $5.95 billion transaction marks a major shift for both companies, giving e& greater financial flexibility to focus on other growth priorities while bringing a new long-term investor to the top of Vodafone’s shareholder register.