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UAE Telco E& to Exit Vodafone via $6 Billion Stake Sale

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UAE Telco E& to Exit Vodafone via $6 Billion Stake Sale

Emirates Telecommunications Group Co. (ADX:EAND), d/b/a e&, agreed to sell its entire 16.21% stake in Vodafone Group (VOD.L) to an acquisition vehicle owned by French billionaire Xavier Niel's family group for $5.95 billion.

The United Arab Emirates-based company said Friday it will divest 3,944,743,685 Vodafone shares to acquisition vehicle Vega for 1.125 pounds sterling apiece, exiting its investment in the British telecommunications giant. The consideration comprises 1.105 pounds in cash and a final dividend of 0.0202 pound per share to be paid by Vodafone on July 30.

The decision comes after e&'s strategic review of its international investment portfolio, with its board representative stepping down as a nonexecutive director of Vodafone with immediate effect.

"The shares will be sold simultaneously through off-market block trades to three financial institutions who will hold the shares until Vega completes regulatory requirements. e&'s Board decision to exit this investment reflects the natural evolution of its strategic priorities, enabling the Group to sharpen its strategic focus on core businesses while unlocking the value created through this investment," according to the Emirati company.

The transaction remains subject to customary closing conditions, with completion expected "in the near future."

In a separate same-day release, Vodafone confirmed e&'s divestment and that the relationship agreement between the two companies is now terminated as a result of the transaction.

Meanwhile, Vega said in its own statement that it is set to become Vodafone's top shareholder following completion of the deal, with Niel saying the British telco is a "compelling" investment opportunity.

"We are confident Vodafone can deliver sustainable growth and strong cash flow generation over the long term and - as an anchor investor based in Europe - we are ready to contribute our deep sector expertise and operational know-how to its future success," Xavier Niel noted.

Vodafone shares were trading 11% higher in London as of Friday midday.

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