LONDON, UK: Vodafone confirms that it is in discussions with CK Hutchison Holdings Limited (CK Hutchison) in relation to a possible combination of Vodafone UK and Three UK.
Hutchison 3G UK Ltd (Three UK) is a British telecommunications and internet service provider currently based in Reading, England. It is a subsidiary of CK Hutchison Holdings, operating under the global Three brand.
The envisaged transaction would involve both companies combining their UK businesses, with Vodafone owning 51% and our partner CK 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 UK Government rightly sees 5G as transformational for the economy and society and critical to the UK becoming more competitive in an increasingly digital world.
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.
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,” company noted in a statement.
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.
There can be no certainty that any transaction between the two companies will ultimately be agreed.
CK Hutchison Holdings Limited is a Hong Kong-based and Cayman Islands-registered multinational conglomerate corporation. The company was formed in March 2015 through the merger of Cheung Kong Holdings and its main associate company Hutchison Whampoa. CKH is one of the world’s leading container terminal operators and a world leader in port services, holding interests in 52 ports in 26 countries.