Vodafone Group, Three UK putting final touches on tie-up with Britain

Vodafone Group Plc and Three UK are putting the final touches on a deal to create Britain’s largest mobile operator and may announce details of the tie-up as soon as this month, people with knowledge of the matter said. 
 

London-listed Vodafone and Three UK’s owner, CK Hutchison Holdings Ltd., are working through the last details of the structure of the deal, and ways to address potential antitrust issues surrounding it, the people said. 

The companies are also discussing how CK Hutchison may exit its investment in the joint venture in the longer term, according to the people, who asked not to be identified discussing confidential information. Talks are ongoing and no final decisions on the structure of the merger or timing of any announcement have been made, they said. 

Analysts have estimated a deal could create a wireless giant worth about €16.5 billion ($17.5 billion). Spokespeople for Three UK and Vodafone declined to comment, while a representative for CK Hutchison couldn’t be reached for comment outside regular business hours in Hong Kong.

Vodafone and CK Hutchison confirmed in October that they were in discussions about merging their UK businesses. Under proposed terms disclosed at the time, Vodafone would own 51% of the new venture, with the rest held by CK Hutchison. Discussions have been held up by a raft of regulatory and political hurdles, as well as the departure of Nick Read as Vodafone’s chief executive officer at the end of 2022. 

A potential deal between Vodafone and Three UK has been talked about for years, and Vodafone previously teamed up with CK Hutchison in other markets such as Australia. 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 and Virgin Media O2—both of which struck mergers in recent years.