Vodafone Group has announced that its largest shareholder, Emirates telecoms group Etisalat, also known as e&, will be joining its board as the two companies look to strengthen their strategic relationship. This move is expected to bring additional telecoms experience to Vodafone’s board and will benefit both companies by offering joint cross-border digital services and solutions to multi-nationals and public sector organizations.
Hatem Dowidar, CEO of e&, will stay on Vodafone’s board for as long as e& maintains its current 14.6% stake in the British company. If e&’s shareholding exceeds 20%, it will be able to nominate a second non-executive director. The telecoms giant has stated that it is open to increasing its stake in Vodafone.
The new partnership has the potential to lead to joint procurement, closer roaming agreements, and collaboration in technology. E& has operations in 16 countries across the Middle East, Asia, and Africa, making it an ideal partner for Vodafone, which has operations across Europe and Africa.
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The two companies will also consider consolidation in major markets like Britain and Italy, which could benefit all three of Vodafone’s telecoms industry shareholders, including French telecoms billionaire Xavier Niel, who competes with Vodafone in Italy, and Liberty Global, Vodafone’s partner in the Netherlands.
Vodafone’s new CEO, Margherita Della Valle, who was appointed permanently last month, has expressed her enthusiasm for closer alignment with e&. This move is seen as crucial for Della Valle, who is under pressure to shake up the group and drive consolidation in major markets.
Shares in Vodafone were trading down 0.5% in early deals on Thursday, but this partnership has the potential to boost the telecoms giant’s performance in the long term.
In conclusion, Vodafone’s partnership with e& is expected to bring numerous benefits to both companies, including joint cross-border digital services, closer alignment, and more telecoms experience on Vodafone’s board. This move could also lead to consolidation in major markets and benefit all three of Vodafone’s telecoms industry shareholders. With this strategic relationship, Vodafone is poised for a more promising future, which could positively impact its shareholders in the long term.