Vivendi has struck a deal to buy Vodafone's 44% stake in France's second-biggest telecom operator SFR for €7.75 billion, giving it full control of its most lucrative unit.
Vivendi said it would also pay Vodafone an extra €200m reflecting the generation of cash between January and July 2011.
The deal caps months of talks between the two telecom giants and puts an end to their roughly decade-long partnership in Europe's third-biggest telecom market in terms of revenue.
The SFR deal is the largest sale Vodafone has done to date as part of its strategy to sell the minority stakes it does not control and retrench after a decade-long international expansion.
Responding to investor pressure to clean up its portfolio, Vodafone has already sold its minority stake in China Mobile and begun a sale process of the nearly 25% it owns of Poland's Polkomtel.
In its statement yesterday, Vodafone said it would return €4.5 billion of the net proceeds to shareholders, or nearly 60%, by way of a share buy-back. The rest of the proceeds would go to reducing the group's debt.
Vivendi will pay for the SFR deal in cash, using proceeds from selling its 20% holding in NBC Universal and the settlement from an ownership dispute over a Polish telecom operator.
Both companies said in separate statements yesterday that the deal was expected to close by the end of June 2011 and was subject to regulatory approval.
They also said they would continue to work together as 'commercial partners' for three years, in a reference to what is likely a roaming agreement between the two groups.
Meanwhile, Vodafone Ireland has acquired Dublin-based telecoms services company Interfusion Networks. Interfusion, which provides network and internet services to business and government customers, employs 21 people.
