Britain (Common Wealth) _ Vodafone and Three owner CK Hutchison Group have announced an agreement to merge their UK networks, creating a European telecoms behemoth and Britain’s largest provider.
The decisions were published on Wednesday, following the two corporations’ public announcement in October that they were in talks. Vodafone’s stock jumped 2.5 percent after the agreement was announced.
Together, we will have the scale required to develop a best-in-class 5G network for the UK, revolutionizing mobile services for our customers and opening up new opportunities for businesses across the country, said Canning Fok, co-managing director of CK Hutchison.
Vodafone will hold 51% of the combined group, while Hutchison will own 49%. According to the firms, it will be overseen by current Vodafone UK CEO Ahmed Essam.
Darren Purkis, the current finance chief of Three, will take on the same role in the new group.
The combined operator will have approximately 27 million customers, surpassing BT’s EE and VM O2, which are owned jointly by Telefonica and Liberty Global.
Prior to the merger, Three UK and Vodafone UK were the fourth and third-largest carriers in the UK.
Regulators who have previously opposed transactions that lower the number of networks in big areas from four to three will scrutinize the transaction.
“For Vodafone, this transaction is a game changer in our home market, Vodafone will control 51% of the company “ the company stated.
This deal is a game changer for Vodafone in our home market, according to Vodafone CEO Margherita Della Valle. “This is a vote of confidence in the UK and its ambitions to be a centre for future technology.”
Customers would suffer no additional charges, and there would be flexible, contract-free deals with no annual price hikes, as well as social tariffs, according to the corporations.
The two companies announced they would invest £11 billion ($14 billion) in Britain over ten years to build “one of Europe’s most advanced stand-alone 5G networks.”
In addition, Vodafone and Three have agreed to take on £6 billion in debt. Vodafone will take £4.3 billion and Three will take £1.7 billion, both of which will be refinanced, according to the firms.
