Vodafone Group Plc and CK Hutchison Holdings Ltd. are nearing a £15 billion ($19 billion) agreement to combine their UK telecommunications businesses and create the country’s biggest mobile-phone operator, according to the Financial Times.
(Bloomberg) — Vodafone Group Plc and CK Hutchison Holdings Ltd. are nearing a £15 billion ($19 billion) agreement to combine their UK telecommunications businesses and create the country’s biggest mobile-phone operator, according to the Financial Times.
The proposed combination, with 28 million customers, is set to have an equity value of £9 billion, the newspaper reported, citing several people close to the matter. The new company will carry around £6 billion of debt, taking its enterprise value to £15 billion, according to the report.
The deal is expected to be unveiled this month, the Financial Times said. Bloomberg News reported in March that the two corporate giants were putting the final touches on the planned tieup.
Vodafone and CK Hutchison, owner of mobile-phone unit Three UK, confirmed in October they were in discussions about merging their UK businesses. Under proposed terms at the time, Vodafone would own 51% of the new venture, with the rest held by CK Hutchison. Discussions have been held up by regulatory and political hurdles, as well as the departure of Nick Read as Vodafone’s chief executive officer at the end of 2022.
Margherita Della Valle was last month confirmed as Vodafone CEO.
The deal has been talked about for years, and Vodafone previously teamed up with CK Hutchison in other markets such as Australia. Executives believe combining operations in the UK will give the companies the necessary scale to accelerate the roll out of 5G and better compete against the likes of BT Group Plc.
According to the Financial Times, the planned union could pave the way for Hong Kong-based CK Hutchison to exit the UK telecoms market. Regulatory approval for the deal may take more than a year, the newspaper said.
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