UAE telecoms group e& has agreed to sell its entire 16.21% stake in Vodafone for around £4.4bn following a strategic review of its international investment portfolio, ending its relationship with the UK telco.

The Abu Dhabi-based company (formerly Etisalat) has entered into a binding agreement to sell its 3.94 billion Vodafone shares to Vega, an acquisition vehicle wholly owned by the Niel family, for £1.125 per share.

The shares will initially be transferred through off-market block trades to three financial institutions while Vega completes the required regulatory approvals. e& said the transaction would generate cash proceeds of around £4.5bn.

As part of the transaction, e& also terminated its 'relationship agreement' with Vodafone and its board representative, CEO Hatem Dowidar, stepped down as a non-executive director of the British telecoms company.

Vodafone shares rose around 12% following the announcement.

This ends what had been viewed as a strategic investment by e&, which started buying Vodafone stock in 2022 and eventually built its stake above 16%.

After regulatory approvals, French serial entrepreneur and billionaire Xavier Niel will become Vodafone's largest shareholder at a time when the telecoms service provider is completing a multi-year restructuring and integration of the merger with Three UK. Analysts see the sale as a sign that e& is stepping back from ambitions to become a broader global telecom investor, while Niel is increasing his influence over the European telecom sector.

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