Vodafone, CK Hutchison to unveil 15 bn pounds UK mobile tie-up
Vodafone and CK Hutchison are close to agreeing a merger of their UK telecoms businesses, two sources said, in an expected 15 billion pounds ($19 billion) deal that would create the country’s biggest mobile operator.
The deal would value the equity of the combined group at about 9 billion pounds, with roughly 6 billion pounds of debt, the Financial Times reported. The valuation is roughly in line with peers.
Negotiations, which have been protracted, are expected to be completed this month, one of the sources familiar with the matter said. The second source said an announcement could come “very soon”.
Hutchison is scheduled to update on first quarter trading on May 9, while Vodafone publishes it full-year results on May 16.
The tie-up – with a planned ownership split of 51% Vodafone and 49% Hutchison, the Hong-Kong telecoms-to-ports conglomerate part-owned by billionaire Li Ka-shing – is likely to face intense regulatory scrutiny.
CK Hutchison’s senior leadership met British government officials in March to seek political support for the deal, three sources told Reuters last month.
Hutchison’s co-managing director Canning Fok also met Vodafone’s interim Chief Executive Margherita della Valle, who has since been appointed permanently to the role, two of those sources said.
The combination could also enable Hong Kong-based CK Hutchison to withdraw from the UK telecoms market, the Financial Times said on Thursday. However, it added that no agreement had been finalised and circumstances might still change. Reuters
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