Vodafone and CK Hutchinson, the owner of Three, are reportedly on the verge of announcing a merger in the UK, as stated in a report by Reuters. The news agency suggests that the deal could be revealed either on Friday or early next week.
According to the report, the merger will align with previous reports from October last year, indicating that Vodafone will hold the majority stake in the combined group (51%), while Hutchinson will retain the remaining 49%.
The valuation of the new company is estimated to be around $18.6 billion, including debt.
The Vodafone/CK Hutchinson merger has been a topic of discussion for some time and has already had significant implications in the market. Some argue that the former CEO of Vodafone, Nick Read, stepped down due to the inability to consolidate the UK market, which was one of his primary goals. Shareholders expressed their frustration, leading to a change in leadership.
The current CEO, Margherita Della Valle, has been under pressure to improve the company’s performance. Just a month ago, Della Valle announced plans to cut 11,000 jobs in an effort to enhance agility in the market.
However, the merger proposal has faced regulatory scrutiny due to concerns about reducing the number of network operators in a major market like the UK. The deal is still pending regulatory approval, according to Reuters.
Hutchinson’s CFO, Frank John Sixt, also stated that finalizing the deal has been “extremely difficult.”
If the merger proceeds, the combined group will become the largest mobile operator in the UK, serving approximately 27 million customers. This would position the new entity ahead of BT’s EE and VM O2, as well as Liberty Global, as reported by Reuters.
