: Vodafone and Three to form new U.K. new mobile company in challenge to BT

Vodafone Group PLC VODUK:VOD and CK Hutchison Group Telecom Holdings, a subsidiary of CK Hutchison Holdings Ltd. HK:1, on Wednesday announced a deal to combine their U.K. businesses. “The merger will create a third operator with scale, leveling the competitive playing field, increasing competition to the UK’s two leading converged operators,” the companies said. BT’s EE limited is currently the U.K.’s biggest mobile player. Under the deal terms, Vodafone will own a 51% chunk and CK Hutchison a 49% stake. “MergeCo will reach more than 99% of the U.K. population with our 5G standalone network, delivering to customers up to a six-fold increase in average data speeds by 2034,” the companies said in a statement. The combined business will invest £11 billion ($13 billion) in the U.K. over 10 years and offer fixed wireless access (mobile home broadband) to 82% of households by 2030, The companies expect annual cost and capital expenditure synergies of more than £700 million by the fifth full year post-completion, The deal is expected to close before 2024, pending approval by shareholders and regulators. Shares of Vodafone rose 2.8% in London, with a similar gain for U.S. listed shares. CK Hutchison shares closed 0.5% lower in Hong Kong.

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