Hutchison and Vodafone in talks since October on UK merger
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Hutchison had said negotiations in final stages
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Vodafone will own 51% and Hutchison 49% of tie-up
LONDON, May 9 (Reuters) - CK Hutchison will likely finalise a deal on merging its Three UK mobile network with Vodafone's in Britain, its chief financial officer Frank John Sixt said, but getting the deal over the line was "extremely difficult".
The companies have been in talks since October to combine Britain's third and fourth-largest networks in a deal that would be worth around 15 billion pounds ($18.9 billion) and an agreement had been expected imminently.
Sixt, however, signalled some issues still had to be agreed.
"It is probable as has been speculated that we will reach an understanding with our friends at Vodafone," he told investors after a trading update on Tuesday.
"Although I would say they (Vodafone) are extremely difficult to draw a conclusion with on the one hand, but on the other hand they are, in the end, very good partners."
"So the first part makes me a little bit more skeptical but the second part makes me a little bit more optimistic," he added.
Vodafone, which will own 51% of the combined UK group, declined to comment.
Sixt was more positive about Italy, where the company's Wind Tre is nearing a deal to sell a majority stake in its infrastructure business to Swedish private equity firm EQT.
"I think it's becoming pretty likely that you'll see an announcement in a relatively short period of time in terms of a material development in Italy," he said.
The British company, which appointed its interim chief executive, Margherita Della Valle, to the role permanently last month, has struggled to drive the consolidation it has said is needed in some of its major markets.
Hutchison's senior leadership met British government officials in March to seek support for the deal, which will be subject to intense regulatory scrutiny, sources have told Reuters.
Hutchison's Co-Managing Director Canning Fok, who said in March the talks were in the final stages, also met Della Valle, sources have said.
Three UK reported 5% growth in first-quarter revenue to 610 million pounds and a 7% increase in its total margin to 389 million pounds.
Three UK Chief Executive Robert Finnegan, however, said the company's returns remained below the cost of capital.
"Connectivity is crucial to how we live and work; for the industry to continue investing in the UK’s digital infrastructure, market structural change is needed," he said. ($1 = 0.7923 pounds) (Reporting by Paul Sandle, Editing by Sarah Young and Sharon Singleton)
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