British cellphone company Vodafone confirmed on Friday that it is selling its Italian business to Switzerland’s Swisscom for 8 billion euros ($8.7 billion) and will hand back half of the proceeds to its shareholders through the buyback of company shares.

Vodafone said the move, with talks first announced Feb. 28, represented an “attractive valuation” and marked the final step of its strategy to sell off parts of its European portfolio.

Swisscom, a telecoms operator, will pay in cash that it will finance through new debt. It is aiming to merge its acquisition with Fastweb, the company’s subsidiary in Italy.

It said the deal will help it unlock 600 million euros in savings and will enable the combined entity to sustain investments and offer improved services.

“The industrial logic of this merger is very strong,” Swisscom CEO Christoph Aeschlimann said. “Fastweb and Vodafone Italia are an ideal fit to create high added value for all stakeholders.” As part of the deal, which is expected to be completed by the end of the first quarter of 2025, the two firms agreed that Vodafone will continue to provide “certain services” to Swisscom over the next five years. Swisscom will pay annual initial charges of 350 million euros, which is expected to decrease over time.

Vodafone added that the two companies also are “exploring a closer commercial relationship to enable collaboration across a broad range of areas, beyond Italy.” Vodafone Chief Executive Margherita Della Valle said the sale “creates significant value for Vodafone and ensures the business maintains its leading position in Italy.” Vodafone has been looking to free up cash and improve its financial performance by selling off parts of the business, including its Spanish arm, having previously struck deals to sell its divisions in Hungary and Ghana.

The markets appeared to welcome the deal, with Vodafone’s shares closing 5.7% higher in London and Swisscom’s ending 4.9% up in Zurich. “Vodafone’s Italian business has been struggling, so shedding this weight should help the group refocus,” said Sophie Lund-Yates, lead equity analyst at stockbrokers Hargreaves Lansdown. “Attention will now turn to how effectively Vodafone uses its resources to fix wider challenges, including high debts, costs and some increasing competition. ” Its refreshed strategy also has seen it seek to merge its UK business with Three UK to create Britain’s biggest mobile phone network worth around 15 billion pounds ($19 billion). The proposed tie-up will face regulatory scrutiny over competition concerns.

G7 consensus on AI: The ministers of the G7 countries reached a landmark consensus in Verona, Italy on the critical global debate of Artificial Intelligence (AI). Under the scope ‘Digital Development - Growing Together’, G7 countries acknowledged the need to work in partnership with developing countries to strengthen local AI digital ecosystems, according to the United Nations Development Programme (UNDP).

It says that by collaborating with the UNDP, the Italian G7 Presidency championed the need for new multi-stakeholder partnerships to foster local impact in developing countries. Key areas include democratising computing power, developing open and secure data models, and strengthening capacities to advance AI for sustainable development. These seek to ensure that access to AI is equitable, inclusive and responsible, thereby supporting safe, secure and trustworthy development and deployment.

“In line with the Italy-Africa Mattei Plan, the Ministry of Enterprises & Made in Italy is grateful for the achievement of this consensus on digital development in the G7 Ministerial. The engagement with Africa - governments, the private sector, including start-ups and industries - has strengthened our resolve that we must democratise AI resources, and ‘walk the talk’,” said Adolfo Urso, Minister of Enterprises and Made in Italy.

In a milestone year for digital development, the Italian G7 Presidency and the Brazilian G20 Presidency are both advancing dialogues and actions, with AI identified as a common priority for sustainable development.

“Brazil’s G20 Presidency congratulates Italy for the consensus achieved in Verona. In line with our G20 theme on mobilising actions for a just world and a sustainable planet, we look forward to working together with the G7 countries and other partners in the G20 to move forward our priority on AI to drive sustainable development and to reduce inequalities,” said Ambassador Luciano Mazza de Andrade, Chair of Brazil’s G20 Digital Economy Working Group.