CK Hutchison will control 49% of the combined business while Vodafone, Britain’s third largest mobile provider, will own the remainder, the companies said in a statement Wednesday.
Vodafone will have the right to buy out the merged business from CK Hutchison after three years, if it reaches a value of at least £16.5 billion including debt.
The combined business will invest £11 billion in the U.K. over a decade to create “one of Europe’s most advanced standalone 5G networks,” according to the statement. CK Hutchison and Vodafone said it will offer mobile broadband to 82% of Britain’s households by 2030. The transaction is set to close before the end of 2024. Upon completion, the new company will overtake two leading mobile providers in the U.K., namely Virgin Media O2, a joint venture between Liberty Global and Spain’s Telefonica, and BT Group’s EE.
“Three UK and Vodafone UK currently lack the necessary scale on their own to earn their cost of capital,” Canning Fok, co-managing director of CK Hutchison, said in the statement. “Together, we will have the scale needed to deliver a best-in-class 5G network for the U.K., transforming mobile services for our customers and opening up new opportunities for businesses across the length and breadth of the U.K.
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