Vodafone Sells 3.2% Stake In China Mobile For US$6.6 Bln - Reports

9/7/2010 11:54 PM ET

(RTTNews) - British mobile network operator Vodafone Group Plc (VOD: News ,VOD.L: News ) reportedly sold its minority stake in China Mobile Ltd. (CHL: News ), China's largest mobile phone company, for about US$6.6 billion. The public offering for sale of the 3.2% stake in China Mobile was managed by Morgan Stanley, UBS and Goldman Sachs.

Newbury, Berkshire-based Vodafone sold 642.9 million shares, it has held since 2000, at HK$79.20, the lower end of the price range it projected. The sale was part of Vodafone's new strategy to exit non-strategic minority investments.
Vodafone had revealed that nearly three-quarters of the sale proceeds would be returned to shareholder and the remainder would be used to pay down debt. The 3.2% stake in China Mobile was acquired by Vodafone in two separate deals in 2000 and 2002 for about US$3.25 billion. Notwithstanding the sale, the two companies have agreed to continue their commercial and technology cooperation on issues such as roaming and technology developments.
China Mobile is 74% held by state-owned China Mobile Communications Corp., through its 100% ownership company China Mobile (HK) Group Limited, which holds the stake. It is the world's largest mobile operator by market capitalization and subscriber numbers.
Vodafone was also reportedly in talks in May to sell its 55% stake in Vodafone Egypt Telecommunications Co. for about US$4.3 billion, which has not yet materialized. Telecom Egypt SAE (TEGPF.PK), which already owns 45% of Vodafone Egypt, is among the interested parties.
Vodafone, which is aiming to slim down, is also set be reviewing its 44% holdings in French mobile operator SFR, as well as its 45% stake in Verizon Wireless as it is yet to receive a dividend on the investment it made in Verizon in 2005.
Vodafone is also priming to sell off most of its other minority stakes, including its 24% stake in Poland-based Polkomtel, and return the proceeds to shareholders. The divestment strategy is in line with its objective of focusing on its core markets in Europe, Africa and India.