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Li Ka-shing’s Three UK to merge with Vodafone unit to form Britain’s biggest mobile provider worth US$15.7 billion
- Vodafone will own 51 per cent of the joint venture, with no cash consideration being paid as part of the transaction
- Transaction marks latest telecoms deal as part of CK Hutchison’s ‘asset-light’ strategy
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Chad Brayin London
CK Hutchison Holdings, one of the two flagship companies of Hong Kong’s richest man, Li Ka-shing, said it would merge its British telecommunications business with Vodafone’s domestic business, creating the UK’s biggest mobile provider worth a combined £12.4 billion (US$15.7 billion).
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The long-gestating deal that has involved more than a year of talks will see Vodafone own 51 per cent of the combined company, with no cash consideration being paid.
Instead, the joint venture will take on £6 billion in debt, with Vodafone taking on £4.3 billion and Three UK accounting for the remaining £1.7 billion. Upon closing, £1.68 billion of debt owed by Three UK to CK Hutchison will be repaid in cash.
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“Three UK and Vodafone UK currently lack the necessary scale on their own to earn their cost of capital. This has long been a challenge for Three UK’s ability to invest and compete,” said Canning Fok, CK Hutchison’s group co-managing director, in a stock exchange filing in London.
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Li Ka-shing on education
Li Ka-shing on education
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