Activist investor Cevian Capital has purchased an undisclosed stake in Vodafone, the second largest mobile operator in the world, to encourage it to lead a consolidation drive in Europe.
Shares in Vodafone rose 4 percent on Monday.
Vodafone Chief Executive Officer Nick Read has called for more consolidation in Europe and said it was willing to pursue merger opportunities for its Vantage Towers infrastructure spin-out.
He has already completed 19 transactions, helping it focus on Europe and Africa.
The call for consolidation reflects a growing belief in the industry that Brussels may be more open to in-country deals to reduce the number of operators in each market, enabling them to extract greater returns and invest more in their networks.
A need to invest in networks, highlighted during the pandemic, follows many years when regulators in Europe prioritised the needs of consumers, requiring four or five operators in each market to compete and keep prices low.
The biggest players in European telecoms are Vodafone, Deutsche Telekom, Orange and Telefonica. Vodafone reports quarterly results on Wednesday.
The Financial Times said Cevian, Europe’s largest activist fund, wanted Vodafone to be more aggressive in driving consolidation in markets such as Spain, Italy and the UK.
Reuters reported earlier this month that Vodafone and Iliad were in talks to combine their businesses in Italy.
Patrick Drahi owns 18 percent stake in BT Group. Patrick Drahi owns Iliad.
