Vodafone has agreed to acquire CK Hutchison’s 49% stake in VodafoneThree for £4.3 billion, giving it full ownership of the UK’s largest mobile operator.
VodafoneThree is currently owned 51 per cent by Vodafone Group and 49 per cent by CK Hutchison Group Telecom Holdings, which will sell the stake.
The only surprise about the move is its speed as under the terms of the merger, Vodafone had the option of acquiring CK Hutchison’s stake after three years if the merged group reached an enterprise value of £16.5 billion.
Vodafone said that it was the ‘right time’ to take full ownership of VodafoneThree, adding that it was eyeing £700million in annual costs and capital expenditure savings by fiscal 2030.
Max Taylor will continue as chief executive of VodafoneThree, supported by the existing leadership team.
Vodafone added that the deal was subject to UK National Security and Investment Act approval and is expected to complete in the second half of this year.
Vodafone and Three unveiled their merger in June 2023, in which Vodafone held a 51 per cent stake, but this deal will see CK Hutchison’s shares cancelled in exchange for £4.3billion cash.
The deal follows ongoing regulatory and legal scrutiny facing Britain’s mobile operators, even after consolidation in the sector, with providers including Vodafone, BT’s EE, Telefonica’s O2 and Three UK accused of overcharging customers through so-called ‘loyalty penalties’.
Vodafone Three is one of Britain’s largest mobile operators by user numbers, and said it has upgraded its network coverage, speed and reliability since integrating the two businesses.
On Tuesday, CK Hutchison said the deal would enable it to monetise its investment at an attractive valuation and generate substantial cash proceeds for the group. The transaction is subject to regulatory approvals.
CK Hutchison continues to operate telecom businesses in Italy, Sweden, Denmark, Austria and Ireland. It also holds a controlling stake in Hutchison Telecommunications Hong Kong Holdings, which provides mobile services in Hong Kong and Macau.
Margherita Della Valle, Vodafone’s chief executive, said:
‘I’m delighted that we will now have full ownership of VodafoneThree as we roll out one of Europe’s most advanced 5G networks, provide the UK’s best customer experience and drive long-term value for our shareholders.’
