By Anthony O. Goriainoff


Vodafone Group said Wednesday that it has entered into binding agreements with Hong-Kong listed CK Hutchison Group Telecom Holdings, in relation to a combination of Vodafone UK and Three UK, their telecommunications businesses in the U.K.

The London-listed telecommunications group said that Vodafone UK's current Chief Executive Officer Ahmed Essam will become the combined business' CEO with Three UK's Chief Financial Officer Darren Purkis becoming its CFO.

The transaction--for which there is no cash consideration to be paid--is expected to close before the end of 2024, subject to regulatory and shareholder approvals, the company said.

The company said the transaction is expected to result in substantial efficiencies, expected to amount to more than 700 million pounds ($883 million) of annual cost and capex synergies by the fifth full year post-completion, with an implied net present value of over GBP7 billion.

Vodafone said it will own 51% of the combined business with CKHGT owning the other 49%, and that the combined business will invest GBP11 billion in the country over 10 years so as to create one of Europe's most advanced standalone 5G networks.

"For Vodafone, this transaction is a game changer in our home market. This is a vote of confidence in the U.K. and its ambitions to be a centre for future technology," Group Chief Executive Margherita Della Valle said.

Shares at 1024 GMT were up 2.88 pence, or 3.8%, at 75.19 pence.


Write to Anthony O. Goriainoff at anthony.orunagoriainoff@dowjones.com


(END) Dow Jones Newswires

06-14-23 0652ET