Vodafone will own 51% of the new entity while Three will own the remaining 49%
U.K. operators Vodafone and Three UK are expected to announce a merger that would create the United Kingdom’s largest mobile operator by the end of this week or early next week, according to a Reuters report.
According to the report, the two carriers are in the final stage of negotiations towards the completion of the merger and have been discussing a strategy for addressing antitrust concerns.
In October last year, Vodafone Group confirmed that it was in discussions with CK Hutchison Holdings in relation to a possible combination of Vodafone UK and Three.
Vodafone has said that the transaction would involve both companies combining their U.K. businesses, with Vodafone owning 51% and CK Hutchison owning 49% of the combined entity. If such a merger were to be approved, the transaction would create a £15 billion ($18.7 billion) entity comprising £9 billion in equity and £6 billion in debt, according to previous press reports.
Vodafone also has indicated that a deal to create a new telecoms group would be key, given the huge costs of rolling out and maintaining new 5G network infrastructure in the U.K.
With the merger process, Vodafone UK and Three UK will gain the necessary scale to be able to accelerate the rollout of 5G in the U.K. and expand broadband connectivity to rural communities and small businesses, Vodafone previously said.
Previous reports noted that the transaction would be subject to an in-depth investigation by the Competition and Markets Authority.
Three initially launched 5G services in the U.K. in August 2019, with the initial offering of a high-speed 5G broadband service in parts of London. In July, the operator said that its 5G service was currently available across 3,200 sites in more than 400 locations.
Vodafone initially launched 5G services in the U.K. in July of 2019. The telco’s initial offering covered parts of Birmingham, Bristol, Cardiff, Liverpool, London, Manchester and Glasgow.
In January, Vodafone claimed to be the first mobile operator in the U.K. to switch on its 5G Standalone (5G SA) network.
The telco said that selected customers in London, Manchester, Liverpool, Bristol, Bath, Glasgow and Birmingham – and who have Oppo Find X3/X5 Pro, Samsung Galaxy S21/S22 handsets on Unlimited Max plans – will be contacted by the operator to take part in the 5G SA trial.
Other key mobile operators in the U.K include BT-owned EE and Virgin Media O2.
