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Vodafone and Hutchison likely to announce UK merger by Friday

Date: June 07, 2023 Pooja Sharma Pooja Sharma
Vodafone and Hutchison likely to announce UK merger by Friday 
The British telecom giant Vodafone Group PLC and Hong Kong-based CK Hutchison are reportedly nearing the final stages of reaching an agreement to merge their operations in the United Kingdom. The sources familiar with the matter informed Reuters that an official announcement is expected either on Friday or early next week.



According to one of the sources, Vodafone will hold a 51% stake in the combined entity, while Hutchison will own the remaining 49%. The estimated value of the merged group, including debt, could be around USD 18.6 billion, aligning with Vodafone's previous announcement in October.



The companies had previously stated that the ownership distribution would be achieved by adjusting the debt ownership rather than exchanging cash.



Notably, negotiations for the merger, aimed at creating the largest mobile operator in Britain, have been lengthy and complex. Hutchison's Chief Financial Officer, Frank John Sixt, acknowledged last month that finalizing the deal was proving to be "extremely difficult."



Vodafone's newly appointed Chief Executive, Margherita Della Valle, is under pressure to secure agreements in key markets to enhance the performance of the pan-European and African operator. Her predecessor, Nick Read, identified Britain as one of the four markets that would benefit from consolidation.



Upon completion, the merger will serve approximately 27 million customers, surpassing BT's and VM O2, which are owned by Telefonica and Liberty Global, respectively.



The deal is expected to face close scrutiny from regulators, as previous attempts to reduce the number of networks in major markets from four to three have encountered opposition. Vodafone and Hutchison argue that the merger would ultimately benefit consumers by creating a network with the necessary scale to roll out full 5G capabilities and expand broadband connectivity.



According to the sources, Hutchison's senior leadership held meetings with British government officials in March to seek political support for the merger. A few weeks later, the government confirmed its "openness to market consolidation."



Post the reports, shares in Vodafone experienced a 3% increase on Wednesday. However, both Hutchison and Vodafone declined to comment on the matter.



Source Credit: https://www.reuters.com/markets/deals/vodafone-hutchison-announce-uk-merger-soon-friday-sources-2023-06-07/

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Pooja Sharma

Pursuing her professional career as a content writer for over two years now, Pooja Sharma is endowed with a post-graduate degree in English Literature. The articles that she writes are a balanced blend of her ever-growing love of language and the technical expertise that she has gained over the years. Currently Pooja pens insightful articles for Newsorigins and numerous other websites, covering subjects such as business, finance, and technology.