(Boursier.com) — Unsurprisingly, Vodafone and CK Hutchison have formalized the merger of their UK operations in a £15 billion (€17.56 billion) deal. Vodafone will hold 51% of the new group and Hutchison 49%. Current Vodafone UK boss Ahmed Essam will lead the merged structure and Darren Purkis, Three UK’s current chief financial officer, will serve in the same role. The new entity will have around 27 million customers, surpassing EE and VM O2, jointly owned by Telefonica and Liberty Global.
Vodafone will have the right to acquire the entire merged business after three years, if it reaches a value of at least £16.5 billion including debt. The two companies plan to finalize the deal before the end of 2024. This tie-up has been the subject of speculation for years while Vodafone and CK Hutchison have already teamed up in other markets, including Australia.
The deal will nonetheless be subject to scrutiny by regulators, who have already opposed deals that would have had the effect of reducing the number of networks in major markets from four to three. In 2016, the European Union notably prevented Three from buying Telefonica’s O2 business in the United Kingdom with the support of British telecoms policeman Ofcom. Seeking to win backing from politicians, unions and the competition regulator, the two groups said they would invest £11billion in Britain over 10 years to create what they describe it as “one of the most advanced standalone 5G networks in Europe”.
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