Vodafone strikes £15bn merger deal with Three 

Vodafone and Three yesterday struck a long-awaited £15billion merger deal to create Britain’s largest mobile network.

With a combined 27m customers, the new joint venture will leapfrog EE and Virgin Media O2 to claim the top spot.

New Vodafone boss Margherita Della Valle described the deal as ‘a game-changer in our home market’.

But the announcement drew fears of higher prices for consumers.

The deal will face scrutiny by the Competition and Markets Authority (CMA) in a process analysts think could last 18 months, and will also need approval on national security grounds.

Mobile giant: Vodafone and Three have struck a £15bn merger which new Vodafone boss Margherita Della Valle (pictured) described as ‘a game-changer’

It aims to create a joint venture 51 per cent-owned by FTSE 100 giant Vodafone and 49 per cent by Hong Kong-based CK Hutchison, current owner of Three.

Trade union Unite wants the tie-up blocked, fearing it will lead to job losses and push up bills.

It warned of CK Hutchison’s involvement, saying the merger would place a company with ‘deep ties to the Chinese state [in] an even more prominent place at the heart of the UK’s telecommunications infrastructure’.

The deal, announced after months of talks, is intended to complete by the end of 2024.

The company will have a combined value of £15billion, and threatens to up-end Britain’s fiercely competitive mobile market.

Currently, Vodafone is the UK’s third-largest operator behind Virgin Media O2 and BT-owned EE, while Three is in fourth place.

Della Valle said the merger would be ‘great for customers, great for the country and great for competition’. 

Observers pointed out that plans for a similar-scale tie-up between Three and O2 were blocked by competition officials in 2016.

But Della Valle said the market had ‘moved on’ since then and the deal was needed to boost the UK’s mobile and digital infrastructure.

She added: ‘This is a vote of confidence in the UK and its ambitions to be a centre for future technology.’

The company plans to invest £11billion in the UK over ten years in a bid to create ‘one of Europe’s most advanced stand-alone 5G networks’.

The companies plan to cut costs by £700million a year but said it was too early to put a figure on the number of jobs likely to be affected, or say if any offices will close.

They insisted the deal would boost the combined workforce, creating 8,000 to 12,000 new roles in the UK.

Della Valle was confirmed less than two months ago as permanent chief executive of Vodafone after Nick Read was ousted.

Victoria Scholar, head of investment at Interactive Investor, said: ‘This is likely to be Della Valle’s biggest accomplishment so far if the deal crosses the line.’

The head of Vodafone UK, Ahmed Essam, will lead the merged company.