French telecoms billionaire Xavier Niel is to become the largest shareholder in Vodafone, the group behind the UK’s biggest mobile network, after agreeing a £4.4 billion deal to buy out Emirati giant e&’s entire stake.
Niel, the largest private investor in Europe’s telecoms sector, will acquire the 16.2 per cent shareholding, which carries 17.13 per cent of Vodafone’s voting rights, through Vega, a newly created acquisition vehicle. e&, formerly known as Etisalat, will receive £1.11 per share, with ownership expected to transfer by the end of the year.
For the millions of UK businesses that rely on Vodafone for mobile and broadband connectivity, the arrival of a new anchor investor is more than a City curiosity. Niel’s family group runs telecoms businesses across 26 countries in Europe and Latin America, with 139 million subscribers, 45,000 employees and €24 billion in annual revenues. Its assets include iliad, Salt, Monaco Telecom, Eir, Tele2 and Millicom.
He is also one of Europe’s most active technology backers, having ploughed approximately €4 billion into European AI projects since 2022, alongside a longer record of supporting education and entrepreneurship platforms including School 42, Station F, Hectar and Kima Ventures.
Vega has stressed the investment is intended as a long-term, strategic minority shareholding rather than a prelude to a takeover.
The deal lands at a pivotal moment for Vodafone’s UK operations. In May the group agreed a £4.3 billion deal to take full ownership of VodafoneThree, buying out the 49 per cent stake held by CK Hutchison, parent company of Three. The joint venture has already made an £11 billion pledge to bring standalone 5G to virtually every corner of the UK by 2034, a rollout with clear stakes for small firms in poorly connected areas.
Vodafone’s FY26 results showed revenue up 8 per cent to €40.5 billion, with profit before tax of almost £1.9 billion, a sharp turnaround from a £1.5 billion loss the previous year as the group simplifies its business. Investor sentiment was nonetheless dampened by a pause in share buybacks to fund the VodafoneThree buyout, disappointing results in Germany, its largest market, and a miss on its overall adjusted earnings forecast.
The deal also comes amid a wider push for scale in European telecoms. Vodafone chief executive Margherita Della Valle has warned that Europe’s 5G rollout lags behind the US and Asia, blaming fragmented markets and regulation that deters investment.
“Vodafone is a compelling investment opportunity, underpinned by quality assets, strong brands, leadership positions and a diversified geographic footprint,” said Niel. “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.
“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.
“As demonstrated by our past investments – including as minority investors in listed companies like Tele2 and Millicom – we have a proven track record of helping businesses to perform better and create substantial shareholder value.”
The change at the top of the shareholder register comes as Vodafone’s relationship with small business partners remains under scrutiny at home, where the company is defending an £85 million High Court claim brought by former franchisees.
