French telecoms billionaire Xavier Niel has become Vodafone's largest shareholder after purchasing a 16% stake worth £4.4bn through his family investment vehicle Vega. The acquisition follows the sale of the entire shareholding by Emirati telecoms group e&, which had held a stake worth £3.3bn since 2022.
Details of the transaction
e& sold its shares at 112.5p per share, while Niel's purchase price represented a 15% premium to Vodafone's closing share price on Thursday. Vega, established specifically to hold the Vodafone stake, intends to be a long-term minority shareholder, according to Niel.
Vodafone has undergone significant restructuring in recent years, including selling its Italian and Spanish operations, divesting its 50% stake in its Dutch joint venture, and merging with Three to become the UK's largest mobile operator.
Niel's view on Vodafone's potential
Niel, who previously sold a 2.5% stake in Vodafone through his investment vehicle Atlas Investissement in 2022, described the company as 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." He added: "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."
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's background and other interests
Niel, founder of telecoms company Iliad, has built businesses in France, Italy, Poland, and Iceland. Forbes estimates his net worth at $15.5bn (£11.5bn). 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.
Niel's other business interests include the French newspaper Le Monde, which he saved from bankruptcy. Two years ago, he sold almost all of his shares for €1 to the Fund for Press Independence to safeguard the publication's independence.
Potential impact on Vodafone
e& had one seat on Vodafone's board and the right to nominate a second if its shareholding exceeded 20%, but Niel currently has no board representation. Carl Murdock-Smith, a telecoms analyst at Citi, noted that Niel has a record of being an active shareholder and could push for changes, including job cuts. He referenced Niel's investment in Tele2, where after taking a 19.8% stake in 2024, the Swedish telecoms company announced a 15% workforce reduction. "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," Murdock-Smith said. He added: "Investors will be interested to see what level of board representation is requested by Mr Niel."
A spokesperson for Niel stated that the transaction was solely a share purchase with no governance package attached. The spokesperson said: "As a significant long-term shareholder, assuming regulatory approvals are obtained, we would expect an appropriate level of engagement with the company over time."
Shares in Vodafone jumped 12% on Friday following the announcement.
