LONDON/HONG KONG, June 14 (Reuters): Vodafone and CK Hutchison finally unveiled the 15 billion pound ($19 billion) merger of their British operations on Wednesday, saying the creation of the country's largest mobile operator would be good for the economy.
The long-awaited announcement came after the two companies publicly revealed they were in talks in October, and will now trigger a lengthy and intense investigation from regulators.
Seeking to win over politicians, unions and the competition authorities, the two groups said they would invest 11 billion pounds in Britain over 10 years to create what they described as "one of Europe's most advanced standalone 5G networks".
Vodafone will own 51 per cent and Hutchison 49 per centof the combined group, which will be led by current Vodafone UK boss Ahmed Essam, the companies said. The finance chief of Hutchison's Three UK, Darren Purkis, will take the same role in the new group. The combined operator will have about 27 million customers, overtaking BT's EE and VM O2, jointly owned by Telefonica and Liberty Global.
Vodafone, which is currently Britain's third-biggest mobile operator, and fourth-placed Hutchison will have options which would allow Vodafone to acquire the Hong Kong-based conglomerate's 49 per centstake in the future.
The deal will face prolonged scrutiny from regulators who have previously opposed deals that reduce the number of networks in major markets from four to three.
"As a country, the UK will benefit from the creation of a sustainable, strongly competitive third scaled operator - with a clear 11 billion pound network investment plan - driving growth, employment and innovation," Vodafone's new CEO, Margherita Della Valle, said.
