Vodafone to take full control of UK mobile operator in £4.3bn deal

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Vodafone is to take full control of the UK’s biggest mobile operator in a £4,3bn buyout deal with the Hong Kong conglomerate CK Hutchison,The billionaire Li Ka-shing’s business said it had agreed to sell its 49% stake in VodafoneThree – a network with more than 27 million subscribers – to its partner Vodafone,Vodafone will buy out CK Hutchison, paying cash, and cancel the shares,The deal is part of CK’s efforts to reshape its global portfolio, offloading major assets to boost shareholder returns.

It is also looking to sell most of its ports and is considering a potential stock market listing of its retail arm.CK Hutchison held a controlling stake in Three before it announced a merger with Vodafone’s British telecoms network in 2023.The £16.5bn tie-up brought the UK’s third and fourth biggest operators together to create a new market leader, ahead of EE, owned by BT, and Virgin Media O2, owned by Spain’s Telefónica and the US-listed company Liberty Global.Last June, Vodafone promised to invest more than £1bn in expanding its network coverage in the next year, as it sealed the merger with its former mobile rival Three UK.

It was the biggest shake-up in years in the British telecoms industry, as it reduced the four main network operators to just three, alongside BT/EE and Virgin Media O2,While Britain’s competition watchdog initially warned that millions of customers could face higher bills as a result of the merger, it eventually approved the deal in December 2024, subject to a set of legally binding commitments,Susannah Streeter, the chief investment strategist at the Wealth Club investment service, said the Three buyout “will enable Vodafone to have a tighter grip on strategy, cut costs, and potentially lay the groundwork for swifter execution of its plans”,She added: “Given that joint ventures can slow decision-making, this should enable Vodafone to up the pace of its 5G infrastructure rollout, improve network quality so it can compete on performance and reliability,“It may also help with cross-selling its broadband offering, with bundled digital services seen as a cash cow given they generate recurring revenue, often at higher margins.

”Canning Fok, the deputy chair of CK Hutchison and executive chair of its telecoms division, said: “Our group was one of the first in the world to invest in 3G mobile telecommunications with the establishment of 3UK in 2000 and introduce groundbreaking mobile broadband telephony to consumers,“The company has grown from a startup mobile operator, and through merging and forming the present VodafoneThree, has become the number one operator in the UK by subscriber numbers and a market leader in the delivery of telecommunications products and services to UK consumers,”He said the sale allowed the Hong Kong group to “realise the value of our investment” in VodafoneThree,The deal is subject to regulatory approval, including under the UK National Security and Investment Act, and is expected to complete in the second half of this year,Frank Sixt and Dominic Lai, CK Hutchison’s co-managing directors, described the deal as a “win-win” for both companies.

CK Hutchison’s share price rose 2,6% in Hong Kong on Tuesday, while Vodafone’s slipped 0,4%,
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