Vodafone and Three to ‘merge UK operations’

Vodafone and CK Hutchison, the owner of mobile network Three, are reportedly close to reaching an agreement worth around £15 billion to merge their UK operations.

Sources told Reuters the merger could be finalised “as soon as Friday” or by early next week.

The merged company would combine the UK’s third- and fourth-largest mobile operators to overtake EE and O2 as the biggest player in the market with more than 27 million subscribers.

The deal would see Vodafone own 51 per cent and Hutchison 49 per cent of the combined group, sources told the news agency. Each company’s stake would be achieved by adjusting debt ownership opposed to exchanging cash.

The report follows a four per cent drop in Vodafone’s share price after the company missed its own guidance and recorded a full year earnings drop of 1.3 per cent to €14.7 billion from €15.2 billion in 2022.

This resulted in Vodafone’s new chief executive Margherita Della Valle, who officially assumed the role in April following Nick Read’s departure last year, announcing that the company would be axing up to 11,000 roles.

At the time, Della Valle said the company’s performance was “not good enough” and that Vodafone would reallocate resources to “deliver the quality service our customers expect” and drive further growth.

A merger between Three and Vodafone has long been speculated on. The companies confirmed talks of a merger last October under the same ownership structure. Hutchison had previously been exploring a full sale of Three after failing to significantly grow the two-decade old business to the size of its UK rivals.

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