Vodafone Group and CK Hutchison Group announced their decision to merge their business in the UK — Vodafone UK and Three UK.
Vodafone will own 51 percent of the combined business, while CK Hutchison Group will own 49 percent.
Current Vodafone UK CEO Ahmed Essam will become MergeCo CEO, and current Three UK CFO Darren Purkis will take the role of MergeCo CFO. A press release from Vodafone did not indicate the future role of Robert Finnegan, the CEO of Three UK.
Vodafone-Three will reach more than 99 percent of the UK population with its 5G standalone network, delivering to customers up to a six-fold increase in average data speeds by 2034.
Vodafone-Three will invest £11 billion in the UK over 10 years to create one of Europe’s most advanced standalone 5G networks, in full support of UK Government targets.
The merger will deliver up to £5 billion per year in economic benefit by 2030, create jobs and support digital transformation of the UK’s businesses. Every school and hospital in the UK will have access to standalone 5G by 2030.
The merger will create a third operator with scale, levelling the competitive playing field, increasing competition to the UK’s two leading converged operators and will also provide more choice in wholesale partners for the UK’s already competitive MVNOs.
Vodafone-Three will offer fixed wireless access (mobile home broadband) to 82 percent of households by 2030, complementing access to the UK’s biggest full fibre footprint.
The transaction is expected to result in substantial efficiencies. These are expected to amount to more than £700 million of annual cost and Capex synergies by the fifth full year post-completion, with an implied NPV of over £7 billion.
The Transaction is expected to close before the end of 2024, subject to regulatory and shareholder approvals.