Green light from the British Antitrust for Vodafone and Three UK weddingThe competition authority, the CMA, has authorised the merger between the British operator Vodafone and Three UK, but has set an important condition: the two companies will have to “invest billions” in 5G network in the UK.
The merger between the two companies has a worth around £16,5 billion (19,7 billion euros) and the operation will give rise to the largest telephony giant in the UK with over 27 million subscribers
Vodafone – Three UK: 11 billion investment and customers “protected for 3 years”
Vodafone is the third largest telephone operator in the United Kingdom, Three Uk (controlled by the Hong Kong group CK Hutchison) the fourth. The regulator announced its decision at the end of the investigation opened last April and concluded with the commitment of the two operators to investments for 11 billion to create one of the most advanced 5G networks in Europe. The new network will reach 99% of the population and “benefit” over 50 million customers, the two companies said.
The network commitment would also be supported by the customer protections short-term measures that would require the merged company to cap certain mobile tariffs and offer pre-set contract terms to mobile virtual network operators, for a period of 3 years.
Under the deal, first announced in 2023, Vodafone will own 51% of the new company with an option to acquire CK Hutchison’s 49% stake after three years if the merged group reaches an enterprise value of £16,5bn. The merger will be completed by the first half of 2025.
“Today's decision creates a new force in the UK telecoms market and unlocks the investment needed to build the network infrastructure the country deserves,” he said. Margherita Della Valle, CEO of Vodafone Group “Consumers and businesses will enjoy wider coverage, faster speeds and better quality connections across the UK as we build the biggest and best network in our home market. Today’s approval takes the brakes off the UK’s telecoms sector and the increased investment will put the UK at the forefront of European telecoms.”
“Once Three and Vodafone are combined, CK Hutchison will fully support the combined business in the implementation of its network investment plan, the cornerstone of today's CMA approval, transforming the UK's digital infrastructure and ensuring customers across the country benefit from unrivalled network quality,” he said. Canning Fok, Vice President of CK Hutchison and chairman of CK Hutchison Group Telecom Holdings.
The Markets' Reaction
The deal is liked by the Stock Exchange, considering that, after the announcement, the Vodafone title gains over 1% to 70,72 pounds. The entire telecommunications sector is benefiting from the news, which is also supported by the partnership signed yesterday by Iliad with the infrastructure fund Infravia aimed at the development of OpCore, the company controlled by Iliad which deals with the development and management of Data Center in Europe. In an industry study, Deutsche Bank expects increasing satisfaction for telecommunications investors in 2025. For Tim, which in Milan gained more than 3 percentage points, Deutsche Bank has restarted coverage with “hold”.
