• Swindon & Wiltshire M&A, deals
• Thursday December 5 2024
• Author Name: Peter Davison

Vodafone / Three merger gets green light on condition of 5G roll-out scheme

The proposed £15 billion merger between communications giants Vodafone, based in Newbury, and Reading-based Three has been given the go-ahead by the Competition and Markets Authority – so long as the firms commit to invest billions to roll out a combined 5G network across the UK.

The network commitment would be supported by shorter term customer protections which would require the merged company to cap certain mobile tariffs and offer preset contractual terms to mobile virtual network operators, for a period of three years.

The merger will create the UK’s biggest mobile network with 27 million customers. The CMA had previously expressed concerns that the deal could lead to price increases for tens of millions of customers.

In its decision, published today (Thursday), the CMA said the 5G roll-out plan and assurance that the newly-merged firm would cap prices had “resolved its competition concerns“.

Stuart McIntosh, chair of the independent inquiry group leading the investigation, said: “It’s crucial this merger doesn’t harm competition, which is why we’ve spent time considering how it could impact the telecoms market.

“Having carefully considered the evidence, as well as the extensive feedback we have received, we believe the merger is likely to boost competition in the UK mobile sector and should be allowed to proceed – but only if Vodafone and Three agree to implement our proposed measures.

“Both Ofcom and the CMA would oversee the implementation of these legally binding commitments, which would help enhance the UK’s 5G capability whilst preserving effective competition in the sector.”

Vodafone CEO Margherita Della Valle welcomed the news, saying: ““Today’s decision creates a new force in the UK’s telecoms market and unlocks the investment needed to build the network infrastructure the country deserves.

“Consumers and businesses will enjoy wider coverage, faster speeds and better-quality connections across the UK, as we build the biggest and best network in our home market.

“Today’s approval releases the handbrake on the UK’s telecoms industry, and the increased investment will power the UK to the forefront of European telecommunications.”

The merger is expected to formally complete during the first half of 2025. Vodafone will own 51 per cent of the equity and, after three years following completion and subject to certain conditions, Vodafone may acquire Three owner Hutchison’s 49 per cent stake via a Put and Call option.

Latest: Merger of Vodafone and Three creates UK’s biggest mobile network