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CK Hutchinson Holdings Ltd on Monday confirmed it is in discussions with Vodafone Group PLC over a possible merger of Three UK and Vodafone UK.
The Hong Kong-based conglomerate said the envisaged transaction would involve both companies combining their UK businesses with CK Hutchinson holding 49% and Vodafone holding 51% of the combined business.
CK Hutchinson noted that Three and Vodafone do not have ‘the necessary scale’ to earn their cost of capital in relation to 5G. The combination will ensure Three and Vodafone gain ‘the necessary scale to be able to accelerate the rollout of full 5G in the UK and expand broadband connectivity to rural communities and small businesses.’
It said the combined business would challenge the two already consolidated players and bring benefits though a ‘competitively priced access to a third reliable, high quality, and secure 5G network throughout the UK.’
The company noted that there was ‘no certainty’ that any transaction between the two companies will be agreed.
Shares in Vodafone were trading 2.8% higher at 103.93 pence each in London on Monday afternoon.
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