Vodafone in talks with Three UK about merger

“Vodafone confirms that it is in discussions with CK Hutchison Holdings Limited (“CK Hutchison”) regarding a possible combination of Vodafone UK and Three UK, Vodafone said in a statement.

“In the envisaged transaction, the two companies will incorporate their UK businesses, with Vodafone holding 51% and our partner CK Hutchison holding 49 per cent of the combined business,” the statement said.

Vodafone said that relative ownership would be acquired through a differential leveraged contribution at the close, and no cash consideration would be paid.

“The UK Government considers 5G to be transformative for the economy and society and vital for the UK to become more competitive in the rapidly growing digital world,” the statement said.

“The conditions need to be nurtured to ensure thriving competition in the market, otherwise the UK risks losing its opportunity to become a 5G leader. As Ofcom has identified, some operators in the UK – Vodafone UK and Three UK – lack is the scale necessary to earn their cost of capital,” the company said.

The UK British telecom company said that by combining businesses, Vodafone UK and Three UK will achieve the scale needed to be able to accelerate the rollout of full 5G in the UK and expand broadband connectivity to rural communities and small businesses.

“The merged business will challenge the already consolidated two players for all UK customers and benefit through competitively priced access to a third reliable, high quality and secure 5G network across the UK,” the statement said.

It added, “There can be no certainty that any transaction between the two companies will ultimately be agreed upon. Further announcements will be made, if necessary, as appropriate.”

This story has been published without modification in text from a wire agency feed. Only the title has been changed.