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Vodafone and CK Hutchison to announce UK merger deal

Hutchison will likely reach a deal on merging its Three UK mobile network with Vodafone’s, said its chief financial officer, although he added that getting the deal over the line was difficult.

The two businesses have been in talks for more than six months to merge their UK networks, which are the third and fourth largest in the country, and an agreement was expected soon. Sixt, on the other hand, indicated that there were still challenges to work out.

“It is probable as speculated that we will reach an understanding with our good friends at Vodafone,” he told investors after a trading update on Tuesday.

“Although I would say Vodafone are extremely difficult to draw a conclusion with on the one hand, but on the other hand they are, in the end, very good partners.”

“So the first part makes me a little bit more skeptical but the second part makes me a little bit more optimistic,” he added.

Hutchison’s senior leadership met British government officials in March to seek political support for the deal, which will be subject to intense regulatory scrutiny.

Hutchison’s co-managing director Canning Fok, who said in March the talks were in the final stages, has also met Vodafone’s Chief Executive Margherita Della Valle in a push to get the deal through, sources have said.

The combined UK companies – Vodafone UK and Three UK – are expected to be worth GBP 15 billion, of which GBP 6 billion will be in debt.

The deal – if it receives regulatory approvals – will reduce the number of mobile operators in the UK to three. In the past, similar deals – a merger between O2 and Three UK – have been blocked.

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