Vodafone and CK Hutchison Near $19 Billion Merger Deal for UK Telecoms Businesses

The ownership of the merged entity is planned to be split, with 51% held by Vodafone and 49% by Hutchison, the Hong Kong-based conglomerate. The proposed merger could also allow CK Hutchison to exit the UK telecoms market, according to reports. However, the ownership structure is likely to be subject to intense regulatory scrutiny.

Highlights

  • Vodafone and CK Hutchison are reportedly nearing a merger deal for their UK telecoms businesses.
  • The deal is expected to be valued at around 15 billion pounds ($19bn).
  • The two telecoms giants have been competing fiercely in the UK market for years.

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Vodafone and CK Hutchison are reportedly nearing a merger deal for their UK telecoms businesses in a move that could create the country's biggest mobile operator, said a Reuters report. The deal is expected to be valued at around 15 billion pounds ($19bn), with the equity of the combined group valued at 9 billion pounds and approximately 6 billion pounds of debt. Negotiations have been ongoing but are expected to be concluded this month, with an announcement expected to follow soon after.




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The ownership of the merged entity is planned to be split, with 51% held by Vodafone and 49% by Hutchison, the Hong Kong-based conglomerate. The proposed merger could also allow CK Hutchison to exit the UK telecoms market, according to reports. However, the ownership structure is likely to be subject to intense regulatory scrutiny.

CK Hutchison's senior leadership met with British government officials in March to gain political support for the deal. Canning Fok, Hutchison's co-managing director, also held discussions with Vodafone's interim Chief Executive, Margherita della Valle, who has since been permanently appointed to the role.

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The two telecoms giants have been competing fiercely in the UK market for years. The merger could bring together Vodafone's 18 million UK mobile customers with Three UK's 10 million subscribers. However, the deal is expected to face stiff opposition from competitors and regulators. In 2016, Hutchison abandoned a 10.3 billion pounds merger between Three and O2 after it was blocked by the European Commission.

If the deal goes ahead, it would be the latest in a series of telecoms mergers, following the recent merger of Virgin Media and O2. The move towards consolidation is driven by the need to invest in next-generation 5G networks, which require significant investment.

Reported By

Tanuja is a passionate technology and telecom buff who has been following the telecom industry for several years now.

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