Vodafone Group has confirmed that it started discussions with CK Hutchison for merging Vodafone UK and Three UK.
Vodafone aims to own 51 percent and CK Hutchison will be holding the balance 49 percent of the combined business in the UK.
The relative ownership would be achieved through a differential leverage contribution at closing, and no cash consideration will be paid.
Ofcom has identified that some operators in the UK – Vodafone UK and Three UK – lack the necessary scale to earn their cost of capital.
By combining businesses, Vodafone and Three will gain the necessary scale to accelerate the rollout of 5G in the UK and expand broadband connectivity to rural communities and small businesses.
The merged business would challenge the two 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.