Xavier Niel, the prominent French telecommunications entrepreneur, has emerged as the largest stakeholder in Vodafone after acquiring a 16% stake for £4.4 billion.
On Friday, the Emirati telecom firm e& announced its decision to divest its entire shareholding in Vodafone, which was initially valued at £3.3 billion in 2022, selling its shares at 112.5 pence each.
Niel, the founder of Iliad, purchased his stake through his family investment firm, Vega, at a 15% premium over Vodafone’s share price from Thursday. He expressed that Vega is dedicated to being a long-term minority investor in Vodafone.
In recent times, Vodafone has undergone significant restructuring, which has included the sale of its operations in Italy and Spain, as well as its 50% interest in a joint venture in the Netherlands. Furthermore, the company has merged with Three, resulting in the formation of the UK’s largest mobile network operator.
Having previously divested a 2.5% share in Vodafone through another investment entity, Atlas Investissement, in 2022, Niel now regards Vodafone as a “compelling investment opportunity.” He noted that with a more streamlined and focused business model, Vodafone is poised for a new growth phase and is well-positioned to capitalize on substantial untapped value in its European and African markets. He expressed confidence in Vodafone’s ability to achieve sustainable growth and robust cash flow over the long term, and emphasized his readiness to leverage his extensive industry knowledge to contribute to the company’s success.
In May, Vodafone announced plans to acquire CK Hutchison’s 49% stake in their VodafoneThree joint venture, allowing the company to gain full control over the entity.
Niel, who has established telecom businesses across France, Italy, Poland, and Iceland, has a net worth estimated at $15.5 billion (£11.5 billion), according to Forbes. He is also in a long-term partnership with Delphine Arnault, the daughter of Bernard Arnault, France’s wealthiest individual and head of the luxury conglomerate LVMH.
Previously, e& held one seat on Vodafone’s board and had the option to nominate a second member if its stake exceeded 20%. However, Niel currently does not have any board representation.
Carl Murdock-Smith, a telecom analyst at Citi, indicated that Niel has a history of being an active shareholder, which could lead to potential changes, such as workforce reductions. He noted that after Niel acquired a 19.8% stake in Tele2 for $1.3 billion in 2024, the company announced a 15% cut in its workforce.
“Investors are likely to draw parallels with the situation at Tele2 following Niel’s investment, particularly regarding workforce reductions,” Murdock-Smith remarked. “They will also be keen to see what level of board representation Mr. Niel seeks.”
A representative for Niel clarified that Friday’s transaction was strictly a share purchase and did not include any governance arrangements. “As a significant long-term shareholder, pending regulatory approvals, we anticipate a suitable level of engagement with the company over time,” the spokesperson stated.
Niel’s portfolio of interests also includes the French newspaper Le Monde, which he helped rescue from bankruptcy. However, he sold most of his shares for €1 to the Fund for Press Independence two years ago to ensure the publication’s independence.
Following the announcement, Vodafone’s shares surged by 12% on Friday.
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