Vodafone shares opened 2 percent higher this morning after the company announced it has agreed to sell its entire 44 percent stake in French mobile phone group SFR to Vivendi for a cash consideration of €7.75bn.

The agreement includes a final dividend worth €200 which Vodafone will receive on completion of the transaction. In addition, Vodafone and SFR will enter into a Partner Market agreement which will maintain their commercial co-operation.

Following the deal’s completion in June, Vivendi will own 100 percent of SFR. Vodafone said it will continue its affiliation by entering into a partner market agreement with SFR to maintain its commercial co-operation, allowing its customers continued use of its signal when in France.

The company moreover announced that £4bn of the sale’s net profits would be handed back to shareholders through a share buy-back, with the remainder used to pay down debt. Vodafone’s holding in SFR contributed £573m last year to its operating profits.

Vodafone’s CEO Vittorio Colao said: “By returning £4bn to our shareholders, we are increasing our current buy-back programme to £6.8bn in total, equivalent to over 7 percent of Vodafone’s current market capitalisation.”

“Our board remains committed to realising maximum value from our non-controlled assets.  The sale of our stake in SFR, at an attractive multiple, represents a significant further step in the execution of this strategy”, he added.