Vodafone and 3 in merger talks

Author: EIS Release Date: Oct 10, 2022

Vodafone has confirmed that it is in discussions with Hutchison Holdings ‘in relation to a possible combination of Vodafone UK and Three UK’.

 

The envisaged transaction would involve both companies combining their UK businesses, with Vodafone owning 51% and Hutchison owning 49% of the combined business.

 

The relative ownership would be achieved through a differential leverage contribution at closing, and no cash consideration will be paid.

 

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

 

“By combining our businesses, Vodafone UK and Three UK will gain the necessary scale to be able to accelerate the rollout of full 5G in the UK and expand broadband connectivity to rural communities and small businesses,” adds  Vodafone,  “the merged business would challenge the two already consolidated players for all UK customers and bring benefits through competitively priced access to a third reliable, high quality, and secure 5G network throughout the UK.”