Vodafone, the world's largest cellphone group which is negotiating the acquisition of Eircell for €5.1 billion (£6.48 billion), has plugged the last major hole in its European portfolio by taking a €3 billion stake in state-controlled Swisscom. Vodafone shares closed down 1 3/4p sterling at 256 1/4p. Former monopoly operator Swisscom will sell a 25 per cent stake in its Swisscom mobile cellphone division, which is expected to be spun off as a separate company next year, to Vodafone in exchange for cash and/or Vodafone shares.

In a strategic rejig five days before Switzerland begins an auction of four, new-generation mobile phone licences, France Telecom also said it had clinched majority control of Orange Communications, Switzerland's number two mobile operator.

The Vodafone deal puts a relatively small, European mobile group on the global map with the scale and scope it had lacked, while Vodafone's French arch-rival secures another 42.5 per cent stake in its Swiss joint-venture for around €1.6 billion. Vodafone, whose international strategy has hinged on taking control of joint ventures across the globe where it can, insisted it was not eyeing a majority of the Swiss business after striking a deal broadly in line with analyst expectations. "This deal has always been on the basis of Vodafone being an associate, minority shareholder," said Julian Horn-Smith, chief executive of Vodafone Europe.

Although Vodafone said it did not have an option to buy shares in the parent company, it does have the right to increase its mobile holding up to 49 per cent if another minority cellphone stake is sold.