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A sign outside a Vodafone Group Plc mobile phone store in London, UK
Jason Aldeen | bloomberg | Getty Images
Vodafone and CK Hutchison, which owns the Three UK mobile network, have agreed to merge their UK businesses, after talks that have been going on since last year, the companies said wed.
Vodafone will own 51% of the combined business, leaving CK Hutchison the minority stake.
Ahmed Essam, current CEO of Vodafone UK, will lead the new venture, while current UK Three Chief Financial Officer Darren Pirkes will take on the role of Chief Financial Officer in the combined business. The new combined company will invest £11 billion ($13.91 billion) in the UK over 10 years to “create one of the most advanced standalone 5G networks in Europe, in full support of the UK government’s goals.”
The merger is expected to conclude before the end of 2024 and remains subject to regulatory and shareholder approvals.
Vodafone has gone through a period of transition since former chief executive Nick Read resigned at the end of last year. Vodafone appointed Margherita Della Valle as Permanent Chief Executive Officer in April to transform the business.
The combination of Vodafone’s UK business and three UK businesses will reduce the number of mobile operators in the country to just three, after major consolidation in the telecoms sector in the past few years.
Vodafone and Three were lagging behind larger rivals BT-owned EE, Telefonica-owned O2 and Liberty Global via a joint venture. BT acquired EE in 2016, while Telefonica and Liberty Global will launch Virgin Media O2 in 2021.
The deal would need approval from the UK’s Competition and Markets Authority (CMA) which is becoming increasingly powerful and appears to be hampering large mergers and acquisitions. Last month, the Capital Markets Authority moved to block Microsoft’s $69 billion acquisition of gaming company Activision Blizzard.
This is a breaking news story and will be updated soon.
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