03 July 2018
| James Pearce
VEON has agreed to offload its share in Italian joint venture Wind Tre to partner CK Hutchison in a deal worth $2.87 billion.
Wind Tre was formed in 2016 as a merger between
VEON’s (then VimpelCom) Italian operator Wind
Telecomunicazioni and Hutch’s 3 Italia, but the
property will now become wholly owned by the Hong Kong-based
For CK Hutchison, the acquisition of the rest of Wind Tre
gives the company a strong subsidiary in what it calls "an
attractive market". This, the company said, serves as a "key
step" in consolidating its telecoms assets, which include
operations in Europe and Asia.
Canning Fok, group co-managing director of CK Hutchison,
said: "We are delighted to become sole owners of Wind Tre,
which gives us the strongest possible platform to drive
increased and recurring value for our
"Having pioneered mobile technology and digital leadership
in Italy for over 15 years, CK Hutchison looks forward to
continuing to invest in Italy’s digital future,
benefitting consumers and businesses across the country."
The deal is subject to regulatory approval from both the EU
and Italian regulators, but both companies said they expect to
see the sale close in Q3 2018. It took two years for the
original merger to be cleared by regulators.
VEON, which is based in Amsterdam, said it will use the
majority of the equity earned from selling its 50% holding in
Wind Tre to reduce its debt load and its leverage ratio. The
deal means VEON has sold the last of its assets in western
Europe, leaving it with remaining operations across Europe,
Asia and Africa.
VEON said it expects to book a net gain of approximately
$1.100 billion on completion of the deal, while around $400
million of the funding will be used to acquire assets in
Pakistan and Bangladesh from GTH.
VEON submitted a bid on 2 July that would see it buy Jazz
and associated operations in Pakistan and Banglalink in
Bangladesh for a gross consideration of $2.5 billion. The
transaction is subject to approval of GTH shareholders at a
general meeting, along with any regulatory approvals.
"Our goal is to drive greater value for our shareholders
through a more focused and optimized portfolio" said Ursula
Burns, executive chairman of VEON. "To this end, the company
has identified four immediate priorities: simplifying the
Group’s structure, increasing our operational
focus on emerging markets, strengthening the
Group’s balance sheet and supporting the
company’s current dividend policy.
Today’s transactions are important steps towards
"We intend to provide a more comprehensive update on
VEON’s strategy in the coming weeks, which will
cover, among other things, our ambition to deliver operational
excellence across our portfolio, supported by a refocused and
expert HQ that provides strategic expertise and direction to
mergers and acquisitions