Altice, the multinational telecoms group owned by French billionaire Patrick Drahi, has finalised its joint venture arrangement with Vodafone which saw it acquire 50% of Vodafone Germany following European Commission approval.
Vodafone Germany’s deal with Altice, which has a 12% stake in Vodafone’s primary UK rival BT, was announced back in October 2022.
Called FibreCo, the joint venture intends to supply full-fibre broadband coverage to seven million homes in Germany over a six-year period.
Over the roll-out period, FibreCo intends to invest up to €7bn (£6.2bn), which will be partly financed by debt that will be non-recourse to Vodafone and Altice.
Total debt facilities of up to €4.6bn have been arranged with a group of leading financial institutions to support the network deployment.
Analysts at Deutsche Bank said that the perception that Vodafone needs to deploy full-fibre across all of its German cable footprint has weighed with a resulting valuation that is “materially incongruous” with the recent cable infrastructure deals inked in Belgium and Spain.
Consensus opinion among equities analysts has Vodafone shares at a buy, with a target price of 122p, suggesting a 24% upside against going prices.