Vodafone is reviewing options for its Italian unit
Swisscom39;s Fastweb also in rival deal talks, sources say
Vodafone39;s shares jump 6.6

MILANLONDONPARIS, Dec 18 Reuters Iliad said on Monday it had submitted a proposal to Vodafone to merge their Italian units, a move that would combine its fastgrowing consumer base with the British company39;s strength in business in a highly competitive market.

Shares in Vodafone, which said last month it was reviewing options for its Italian operation, rose 6.6 in early trading on the Iliad jointventure proposal, which Reuters first reported on Friday.

The French company39;s move comes as Vodafone also explores a potential deal with Swisscom39;s Fastweb Italian unit, sources familiar with the matter said.

Operators in Italy are studying ways to consolidate a market grappling with shrinking revenue and margins, which is depriving investors of returns on their capital.

Vodafone said it noted Iliad39;s offer, which has the unanimous backing of Iliad39;s board and its main shareholder Xavier Niel.

Vodafone is supportive of inmarket consolidation in countries where it is not achieving appropriate returns on invested capital and confirms it is exploring options with several parties to achieve this in Italy, including through a merger or a disposal, it said.

Iliad and Vodafone had been involved in talks for some time before Iliad made its proposal public on Monday, one person familiar with the matter said, but sticking points…