Vodafone has announced it will take full ownership of Vodafone Three for £4.3 billion, marking the latest development in the blockbuster merger between two of Britain's largest mobile networks. The FTSE 100 telecoms giant will buy out the 49 per cent stake held by CK Hutchison, the Chinese owner of Three, giving it complete control of the telecoms firm.
Deal Details
Vodafone and Three originally announced their merger in June 2023, with Vodafone holding a 51 per cent stake. Under the new agreement, CK Hutchison's shares will be cancelled in exchange for £4.3 billion in cash. CK Hutchison, controlled by Hong Kong billionaire Li Ka-Shing, owns Three's operations in Ireland, Austria, and Indonesia. The deal values Vodafone Three at £13.5 billion, including debt.
Strategic Benefits
Vodafone stated that now is the "right time" to take full control, as the integration of the two businesses has already improved network coverage, speed, and reliability. The company expects to obtain full ownership in the second half of this year. By 2030, the telecoms firm will generate £700 million per year in savings as a result of the takeover.
Margherita Della Valle, Vodafone's chief executive, said: "I'm delighted that we will now have full ownership of Vodafone Three 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."
Growth and Expansion
Vodafone Three's merger has already begun to pay off, with the firm reporting seven per cent revenue growth in the six months to November, reaching £19.6 billion. The company has started merging some of Three and Vodafone's high street stores and aims to roll out Three across 130 new locations. It also plans to reach 99 per cent of the UK population with 5G by the end of the decade.
Legal Challenges
Despite the positive outlook, Vodafone Three 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 that left them facing bankruptcy, while cross-party MPs push for new laws to protect franchisees.
Vodafone's share price has risen by more than 18 per cent so far this year, to 117p.
