May 11, 2022
Vodafone in talks to combine UK arm with CK Hutchison’s Three
Telecoms group Vodafone is in talks to combine its UK operations with its domestic rival Three UK, the mobile operator owned by Hong Kong infrastructure conglomerate CK Hutchison, people with direct knowledge of the matter said. The deal, if it materialised, would herald the latest attempt to consolidate the British mobile market as Vodafone faces pressure from Europe's largest activist investor, Cevian Capital, to simplify its business, pursue deals in national markets and improve returns. A combination of Vodafone UK and Three UK would bring together the third and fourth largest mobile network operators in Britain, though any deal to reduce the number of leading brands from four to three would trigger scrutiny from competition authorities. Over the past year, Vodafone chief executive Nick Read has been vocal about his desire to pursue deals in countries he believes suffer from an excess of market competition, including Spain, Italy and the UK. The exact structure being discussed between Vodafone and CK Hutchison could not be learnt, though Read has said on many occasions that he is focused on pursuing combinations more than outright purchases, given his ambitions to reduce the group's debt. Analysts had previously speculated that Vodafone could seek to buy Three but noted that it would need to meet CK Hutchison's hefty price expectations for the privilege of consolidating the market.
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