Vodafone and CK Hutchinson close to merging UK telecoms businesses
Vodafone and CK Hutchinson are close to agreeing a merger of their UK telecoms businesses, according to reports.
The new company would have an enterprise value of £15bn and would be the UK’s largest mobile provider with 28m customers, the Financial Times reported on Thursda, citing people familiar with the matter.
The move to combine Vodafone with CK Hutchinson’s Three UK — which is expected to be revealed later this month — would mean the new company would have £6bn in debt and £9bn in equity value, according to the report.
CK Hutchinson confirmed in October that it was in discussions with Vodafone to combine Three UK with the Vodafone’s telecoms business. The company previously said they would take a 49 per cent stake in the new business, leaving Vodafone with 51 per cent.
The news comes a week after Vodafone appointed Margherita Della Valle to the role of chief executive permanently. The company has been struggling with poor performance in key European markets and a falling share price as it attempts to trim the business and appease investors.
Talks between Vodafone and CK Hutchinson have been ongoing for almost a year but have been delayed several times as a result of blips, including the need to replace Della Valle’s predecessor, Nick Read, after he was ousted in December.
The company’s largest shareholder — the Abu Dhabi-based telecoms company, e& — increased its stake in the company in March and announced it was in talks over potential shifts in its non-executive board.
Telecoms giant Liberty Global also bought an almost five per cent stake in Vodafone earlier this year after claiming shares in the troubled firm are undervalued.
Vodafone and Three UK were both approached for comment.