Vodafone and Three have finalised their £15 billion merger, with the combined business, named VodafoneThree, 51% owned by Vodafone and 49% by CK Hutchison Group Telecom Holdings Limited (“CKHGT”).
Vodafone will fully consolidate VodafoneThree in its financial results, and the Chief Executive Officer is Max Taylor, who currently leads Vodafone UK. Three UK’s Darren Purkis is appointed Chief Financial Officer.
VodafoneThree, now the UK’s largest mobile phone network with approximately 27 million customers, has committed to investing £11 billion over the next decade to enhance its 5G capabilities. Following the merger, £1.3 billion will be invested this financial year.
Margherita Della Valle, Vodafone Group Chief Executive, said:
“The merger will create a new force in UK mobile, transform the country’s digital infrastructure and propel the UK to the forefront of European connectivity.
“We are now eager to kick off our network build and rapidly bring customers greater coverage and superior network quality. The transaction completes the reshaping of Vodafone in Europe, and following this period of transition we are now well-positioned for growth ahead.”
The merger of the UK network businesses, officially completed on May 31, comes nearly two years after it was initially announced.
It was scrutinised closely by the Competition and Markets Authority (CMA) amid concerns it could substantially reduce options for mobile customers and lead to higher bills.
But the CMA gave the go-ahead to the deal in December last year, with conditions.
It said the landmark deal could go ahead if both companies agreed to invest billions of pounds to roll out a combined 5G network across the UK, while the firms were also told to offer shorter-term customer protections requiring the merged company to cap certain mobile tariffs for three years.
Canning Fok, Deputy Chairman of CK Hutchison and Executive Chairman of CKHGT, said:
“As we have demonstrated in other European markets, scale enables the significant investment needed to deliver the world-beating mobile networks our customers expect, and the Vodafone and Three merger provides that scale.
“In addition, this transaction unlocks significant shareholder value, returning approximately £1.3 billion in net cash to the Group.”
Initially, the Vodafone and Three brands will not be changing. Vodafone, Three, VOXI, SMARTY and Talkmobile will all continue to operate independently.
Existing contracts, plans, pricing and customer support remain unchanged.
