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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.
“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
“Together, we will have the scale needed to deliver a best-in-class 5G network for the UK, transforming mobile services for our customers and opening up new opportunities for businesses across the length and breadth of the UK,” she said.
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