VimpelCom and Hutchison to merge Italian mobile units
VimpelCom and Hutchison have agreed to combine their mobile operations in Italy in a deal valued at €21.8 billion.
The merger of the Vimpelcom’s Wind, Italy’s third largest mobile operator, and fourth-placed 3 Italia, would create a competitor that could better compete with market leaders Telecom Italia and Vodafone.
If approved by competition regulators, the joint venture would reduce the number of players in the market to three from four.
“This deal represents a major milestone for our Italian business. The combination of 3 Italia and Wind will create a financially sound and efficient operator that is able to compete head-on in the market place. This joint venture will give the combined business the scale and strength to offer Italian consumers and businesses a state of the art network with greater 4G coverage and higher speeds,” said Canning Fok, co-group managing director of CK Hutchison.
“This transaction underlines CK Hutchison’s continuing confidence in the Italian economy, and its commitment to the development of nationwide digital infrastructure and services in Italy.”
The combined entity will have over 31 million mobile customers and 2.8 million fixed line customers, of which 2.2 million are fixed broadband customers.
The deal is also expected to generate capital expenditure and operating expenditure benefits with a net present value, less integration costs, in excess of €5 billion.
The joint revenue of both companies in FY14 was €6.4 billion. The companies claim that the transaction is one of the largest M&A deals in the country since 2007.