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(Alliance News) - The Competition & Markets Authority on Wednesday said it is considering whether the planned merger the UK businesses of Vodafone Group PLC and CK Hutchison Group Telecom Holdings Ltd would weaken competition.
The companies in June unveiled plans to combine their UK businesses, with Vodafone owning 51% and CK Hutchison 49% of the combined operation.
The two companies and any other interested parties have until November 1 to comment on the CMA concerns, the regulator said. The CMA is considering whether the merger would lead to a substantial lessening of competition within goods and services markets in the UK.
CK Hutchison is a Hong Kong-based telecommunications, ports, infrastructure and retailing conglomerate. It owns the Three UK business. Vodafone is a Newbury, England-based telecommunications operator.
Neither company will pay cash for the merger. Instead, they will take on debt. Vodafone will take on GBP4.3 billion and Three UK GBP1.7 billion.
Back in June, Vodafone had said that the merger in the UK would create the best 5G network in Europe, delivery up to GBP5 billion per year in economic benefit by 2030, with every UK school and hospital having access to standalone 5G by then.
Further, Vodafone anticipates more than GBP700 million of annual cost and capital expenditure synergies by the fifth full year post-completion.
The deal is expected to close before the end of 2024.
Vodafone shares were 0.5% higher at 77.74 pence each on Wednesday morning in London. Hutchison closed up 0.5% at HKD41.25 in Hong Kong.
By Tom Budszus, Alliance News reporter
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