Vodafone takes full control of Three in £4.3bn deal
Vodafone is to take full ownership of Vodafone Three for £4.3bn in the latest twist in the blockbuster merger between two of Britain’s largest mobile networks.
The FTSE 100 telecoms giant said it will buy out the 49 per cent stake held by CK Hutchison, the Chinese owner of Three, to give it full control of the telecoms firm.
Vodafone and Three announced their merger in June 2023, in which Vodafone held a 51 per cent stake, but this deal will see CK Hutchison’s shares cancelled in exchange for £4.3bn cash.
CK Hutchison owns Three’s operations in Ireland, Austria and Indonesia, and is controlled by Hong Kong billionaire Li Ka-Shing.
Vodafone Three is one of the UK’s largest mobile operators by user numbers, and said it has upgraded its network coverage, speed and reliability since integrating the two businesses.
The deal values the FTSE 100 firm at £13.5bn, including debt. Vodafone said it expects to obtain full ownership of the group in the second half of this year.
‘Right time’ for takeover
By 2030, the telecoms firm will generate £700m per year in savings as a result of the takeover deal, it said.
Vodafone said “now is the right time” to take full control of Vodafone Three, saying the deal will allow the telecoms firm to “move at an even faster pace to transform the UK’s digital infrastructure”.
Margherita Della Valle, Vodafone’s chief executive, said: “I’m delighted that we will now have full ownership of VodafoneThree as we roll out one of Europe’s most advanced 5G networks, provide the UK’s best customer experience and drive long-term value for our shareholders.”
Vodafone Three’s merger has begun to pay off, as the telecoms firm reported seven per cent revenue growth in the six months to November, to £19.6bn.
Merger fuels expansion
The firm has started merging some of Three and Vodafone’s high street stores, as it aims to roll out Three across 130 new locations.
The telecoms giant plans to reach 99 per cent of the UK population with 5G by the end of the decade.
VodafoneThree appeared in court in March as it battles 62 of its former franchisees.
The former workers claim the telecoms firm imposed irrational cost-cutting measures which left them facing bankruptcy, as cross-party MPs push for new laws to protect franchisees.
Vodafone’s share price is up by more than 18 per cent in the year so far, to 117p.