* Italian executive streamlined Vodafone with asset sales
* 51-year-old rose quickly from McKinsey to Vodafone
* Shrewd deal-making takes shares to 12-year high
* Colao lands elusive $130 bln deal that will remake group
By Leila Abboud and Kate Holton
PARIS/LONDON, Sept 2 Vittorio Colao, the urbane
Italian boss of Vodafone, believes that negotiating
major deals is an art whose finest practitioners know how to
wield power and resist pressure.
The 51-year-old chief executive, who cut his teeth as a
management consultant at McKinsey, used these lessons at the
negotiating table to do what his predecessors could not: outlast
Verizon Communications in a test of will over the biggest
U.S. mobile provider, Verizon Wireless.
Those who know him say Colao used patience, an acute sense
of timing, pragmatism, and a ruthless streak to agree a $130
billion sale of Vodafone's 45 percent stake in Verizon Wireless.
Colao also drew on a stronger and more trusting relationship
with Lowell McAdam, Verizon Communications CEO, meeting him over
dinner and wine, and sharing a passion for cycling that saw them
once do a 50km (30 miles) race together.
"He's a very good negotiator of deals because he is very
calm," said Michel Combes, Alcatel-Lucent's CEO who worked with
Colao as the head of Vodafone's European operations.
"Colao always has several possible scenarios in his mind to
deal with a particular issue. Then he makes a quick decision
when an opportunity presents itself."
Born in northern Italy, the son of an officer in the
carabinieri military police and a mother who spoke six languages
and worked in publishing, Colao polished his gold-plated resume
at three top universities including Harvard.
After making partner at McKinsey working on telecom, media
and tech from Milan, in 1996 he joined Omnitel, the telecoms
group that became Vodafone Italy.
Three years later, he was running Vodafone Italy where he
started building relationships with Verizon executives who were
on the unit's board because they shared its ownership.
Those ties were part of why Arun Sarin, the prior Vodafone
boss, tapped Colao for the top job in 2008. "Sarin knew that
dealing with the Verizon stake was going to be one of the major
issues his successor would face. Colao had the advantage that
the U.S. side knew and respected him," said someone who knows
"It was definitely one of the things that played in his
favour when he got the CEO job."
According to Vodafone's annual report, Colao took home 3.4
million pounds in salary and benefits last year.
Despite his ambitious nature, the lanky 6 foot 3 inch tall
bespectacled executive dislikes talking about himself and is
absent from London's social scene, leading a quiet life in South
Kensington with his wife and two children.
He likes the cut and thrust of talking to journalists, and
arguing about telecom regulations he sees as wrongheaded, but is
also a private person who does not do small talk, say people who
Another of Colao's attributes is his deep knowledge of
Vodafone's international operations. He likes dropping in
unannounced at Vodafone stores from London to Mumbai to check on
staff and see what products are selling well or poorly.
He doesn't micro manage though. Country managers "are left
alone unless the wheels fall off, and then Colao is all over it
and people get hauled over the coals," said one insider.
Colao's attention to detail and strategic planning mean that
investment bankers do not bother to pitch him ideas for deals
any more. "He has a very clear view on the strategy so it's more
of a collegial discussion," said one banker.
He also avoids negotiating from a position of weakness,
always having a back-up plan to the buy. As Colao was studying a
bid for Germany's biggest cable operator Kabel Deutschland this
spring he also signed a deal with Deutsche Telekom that left
Vodafone less reliant on the fixed acquisition.
Colao has calmed the stormy internal politics at Vodafone
that bedevilled Sarin. The discipline filters down to
communications strategy: Colao is the public face of Vodafone
and rarely allows other top executives to speak to the press.
Colao's career has not been free of missteps, however. In
2004, he left Vodafone after Sarin rebuked him during a board
meeting over a pitch to acquire a company in Bulgaria. The talk
in the company at the time was that Sarin chastised Colao for
not having visited the country.
Colao left to lead Italy's RCS Media Group, which owns
Corriere della Sera, and tried to restructure the publisher but
fell foul of shareholders who included Italy's most powerful
bankers and businessmen.
In 2006 he sought refuge back at Vodafone and was made head
of Southern Europe. He stepped up to the CEO chair in 2008.
Since then, Colao has shown his skill as a clean-up man by
trimming the overseas empire that his predecessors had built up
via acquisitions. He sold a minority stake in China Mobile, then
exited France and Poland, allowing him to return 23 billion
pounds to shareholders in the past three years.
The sale of a 49 percent stake in SFR, France's second
biggest telco, to majority shareholder Vivendi for 7.95
billion euros in April 2011 was a deft coup. Colao got top
dollar for an asset that has plummeted in value since the
arrival of low-cost player Iliad in January 2012.
Yet Colao's record as a buyer of assets and as a builder of
businesses is seen as less strong. His foray into social media
in 2009 with Vodafone 360 was a failure.
Equally, some investors think he took too long to decide to
buy fixed line assets - now seen as a core strategy for the
Vodafone passed up on buying Kabel Deutschland before its
public listing in March 2010 at about 22 euros a share. Four
years later, Colao bought it for nearly four times as much.
"I think it (was) the right deal but they should have done
it sooner and it was so widely trailed they paid more than they
had to," one top 10 shareholder told Reuters.
Investors worry that with the Verizon deal done, Colao could
soon bow out. A few years ago he confided to friends that he
would like to be Italy's foreign minister, although his
political ambitions are said to have ebbed since then.
On Monday, however, Colao said he was "super committed to
the next chapter of Vodafone", something that will please
investors wanting him to rebuild the group without Verizon.
"The market does not want to see him leave," said one top 30