Merger talks heat up for Vodafone and Three UK

Monday 03 October 2022 10:53 am

Merger talks heat up for Vodafone and Three UK

Vodafone and Three UK have reportedly accelerated talks for a merger agreement, paving the way for the pair to become the largest mobile telecoms supplier in Britain.

As first reported by Mark Kleinman for Sky News, Vodafone and CK Hutchison, the Hong-Kong conglomerate behind Three UK, are looking to ink a deal by the end of the year.

Talk of a Three agreement have swirled around for a while now, with City A.M. reporting that the third and fourth largest mobile network operators in the country were discussing a deal.

Back in March Three UK chief Robert Finnegan signalled towards market consolidation after the mobile giant reported humble revenue growth, despite hitting its strongest contract boom since 2012.

Insiders told Sky News that talks were at a “relatively advanced” stage, but there were still hurdles ahead, including the competition watchdog.

Telecoms expert at Enders Analysis Karen Egan told City A.M. at the time that scale is crucial for mobile operators trying to make a return, and “‘sub-scalers”, like Vodafone and Three, are finding this increasingly difficult.

Vodafone has been under increasing strain to speed up its organisational overhaul after it was revealed earlier this year that a notorious activist investor Cevian had taken a stake in the firm.

Despite Vodafone’s recent rejection of Italy’s Iliad and private equity titan Apax Partners’ takeover approach,  it is understood that Cevian are keen for the UK firm to pursue consolidation in key markets.

Three UK declined to comment, and Vodafone were not immediately available for comment.

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