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A sign outside a Vodafone Group Plc mobile phone store in London, U.K.
Jason Alden | Bloomberg | Getty Images
Vodafone and CK Hutchison, which owns the Three UK mobile network, agreed to merge their U.K. businesses, following talks that have been ongoing since last year, the companies said Wednesday.
Vodafone will own 51% of the combined business, leaving CK Hutchison the minority stake.
Current Vodafone UK CEO Ahmed Essam will lead the new enterprise, while the present Three UK Chief Financial Officer (CFO) Darren Purkis will assume the CFO position at the merged business. The new combined company will invest £11 billion ($13.91 billion) in the U.K. over 10 years “to create one of Europe’s most advanced standalone 5G networks, in full support of UK Government targets.”
The merger is expected to finalize before the end of 2024 and remains subject to regulatory and shareholder approvals.
Vodafone has been going through a transition period since its former CEO Nick Read stepped down at the end of last year. Vodafone appointed Margherita Della Valle as permanent CEO in April to transform the business.
The combination of Vodafone’s U.K. business and Three UK will reduce the number of mobile operators in the country to just three, after major consolidation in the telecommunications sector in the past few years.
Vodafone and Three were lagging behind larger rivals EE, which is owned by BT, and O2, which is owned by Telefonica and Liberty Global via a joint venture. BT acquired EE in 2016, while Telefonica and Liberty Global launched Virgin Media O2 in 2021.
The deal will need approval from the U.K.’s Competition and Markets Authority (CMA) which has become increasingly-powerful and looked to hamper big mergers and acquisitions. Last month, the CMA moved to block Microsoft’s $69 billion acquisition of gaming firm Activision Blizzard.
This is a breaking news story and will be updated shortly.
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