Vodafone is said to be on the verge of selling its stake in French mobile phone company SFR in a move that will pave the way for a £5 billion share buyback.
The Newbury-based mobile phone giant is understood to be finalising a deal to sell its 44% holding to French media group Vivendi, which owns the rest of the group, for £7 billion, according to the Observer newspaper.
The group is also expected to announce that it has raised a further £800 million from the sale of its 24% stake in Polish group Polkomtel.
It is thought that some of the money will be returned to shareholders through a share buyback, with the rest used to pay down debt.
The latest transactions are part of Vodafone’s ongoing strategy of streamlining the group through offloading minority holdings it has in telecoms groups around the world.
It has raised more than £7 billion during the past six months after selling its holdings in China Telecom and Japan’s Softbank.
But despite this, the group is expected to hold on to its 45% stake in Verizon Wireless in the US, which has long been tipped for a sale.
It is thought the stake could fetch about £33 billion, but it is understood the disposal would trigger a £10 billion capital gains tax bill.
The group was recently hit with a £1.6 billion back-tax bill by authorities in India, following its 2007 acquisition of the Indian telecom assets of Hong Kong conglomerate Hutchison Whampoa.
Vodafone, whose joint venture with India’s Essar group is one of India’s largest mobile operators, disputes that it owes tax on the 11 billion US dollar transaction (£7 billion) because it took place between two foreign companies.
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