Xavier Niel invests R108 Billion to become Vodafone's biggest shareholder

The shares were purchased from Emirati telecoms group e&, which first invested in Vodafone in 2022 with a stake valued at around R81 billion. The transaction was completed at 112.5 pence per share, representing a 15% premium to Vodafone's closing share price on Thursday.

Niel made the investment through his family-owned investment company, Vega, which was established specifically to hold the Vodafone stake. He said the investment reflects his confidence in Vodafone's long-term prospects and that Vega intends to remain a committed minority shareholder.

The investment comes after Vodafone completed a major restructuring programme, which included selling its operations in Italy and Spain, exiting its Dutch joint venture, and merging with Three UK to create Britain's largest mobile network operator. Earlier this year, Vodafone also agreed to acquire CK Hutchison's remaining 49% stake in VodafoneThree, giving it full ownership of the business.

Niel described Vodafone as a business entering a new phase of growth.

"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," he said.

Niel has built telecommunications businesses across France, Italy, Poland and Iceland and is estimated by Forbes to have a personal fortune of approximately R279 billion (US$15.5 billion).

He is also the long-time partner of Delphine Arnault, daughter of French billionaire Bernard Arnault, chairman of luxury goods group LVMH. Bernard Arnault's fortune is estimated at roughly R2.7 trillion (US$150 billion).

Although e& previously held a seat on Vodafone's board, Niel has not secured board representation as part of the transaction.

However, market analysts believe investors will closely watch his involvement. Citi telecommunications analyst Carl Murdock-Smith noted that after Niel became the largest shareholder in Swedish telecom company Tele2 through a R23.4 billion investment in 2024, the company announced plans to reduce its workforce by 15%.

"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. Investors will be interested to see what level of board representation is requested by Mr Niel," Murdock-Smith said.

A spokesperson for Niel said the acquisition was strictly a share purchase and did not include any governance agreement.

"As a significant long-term shareholder, assuming regulatory approvals are obtained, we would expect an appropriate level of engagement with the company over time," the spokesperson said.

Beyond telecommunications, Niel also has interests in the media industry. He previously rescued French newspaper Le Monde from financial difficulties before transferring nearly all of his shares for about R24.50 (€1) to the Fund for Press Independence to safeguard the newspaper's editorial independence.

Investors welcomed the news, sending Vodafone's share price 12% higher on Friday.