Merger of Vodafone UK and Three UK to create combined business

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Vodafone Group Plc (Vodafone) and CK Hutchison Group Telecom Holdings Limited (CKHGT), a wholly-owned subsidiary of CK Hutchison Holdings Limited (CK Hutchison), have entered into binding agreements in relation to a combination of their UK telecommunication businesses, respectively Vodafone UK and Three UK.

Vodafone will own 51% of the combined business named MergeCo and CKHGT 49%. The new organization is expected to have 27 million customers after the transaction, making it the largest mobile network in the UK. The transaction will also allow the new entity to create a new operator, increasing competition with leading converged operators (BT and Virgin Media O2) and providing more wholesale partnership opportunities for UK MVNOs. The new organization will cover 99% of the UK population with 5G Standalone (SA) networks. Thanks to the new business, every school and hospital in the UK will have access to offline 5G by 2030. The combined business is investing GBP11 billion (US$13.95 billion) in the UK.

The transaction is expected to deliver significant efficiencies of more than GBP700 million (US$890 million) in annual cost and capex synergies by the fifth full year following the completion of the merger. Upon completion of the transaction, no cash will be paid, and businesses will contribute various amounts of debt to achieve separation of ownership. Vodafone will have the option to acquire a 49% stake in CK Hutchison in the future. The deal is expected to close by the end of 2024. 


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