By Leila Abboud and Kate Holton
PARIS/LONDON (Reuters) - Vittorio Colao, the urbane Italian boss of Vodafone (VOD.L), 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 (VZ) 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 both men.
"It was definitely one of the things that played in his favor 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 know him.
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 bedeviled 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 (VIV.PA) 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 group.
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 investor.
(Reporting by Leila Abboud, Kate Holton, Sophie Sassard, and Chris Vellacott; Editing by Giles Elgood)
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- Vittorio Colao
- Verizon Communications
- Verizon Wireless
- Vodafone Italy