Vodafone pursues Three UK and Iliad transactions

Vodafone pursues Three UK and Iliad transactions

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Vodafone is reported to have explored a possible merger with Three UK and is rumoured to be in talks with Iliad to combine their respective Italian businesses.

According to reports, discussions to merge its Italian business units with that of Iliad, comes in an attempt to build a substantial competitor in the in the euro zone's third-biggest economy. Should the deal go ahead, the combined entity will create a telecoms business with a mobile market penetration of approximately 36% and combined revenues of almost €6 billion ($6.80 billion).

Talks are said to be ongoing and according to sources, both companies are exploring ways to secure a deal. Further, Iliad, which is due to launch its wireline broadband in Italy on 25 January, is said to be working with investment bank Lazard on its strategic plans in Italy, meaning that a deal with Vodafone is not guaranteed.

As for the potential transaction with CK Hutchison Holdings' Three UK, Vodafone expressed interest late 2021 in acquiring its smaller rival but didn't result in an agreement. Sources say neither company are in active negotiations.

In November 2021, Nick Read, chief executive of Vodafone Group hinted at further M&A activity in the UK telling the Sunday Times "I’m firmly supportive of consolidation on the right terms,” adding that a merger between Vodafone and Three UK should be approved by regulators if it were to go ahead, after CK Hutchison Holdings was blocked by the European Commission from its proposed £10.5 billion acquisition of O2 UK back in 2016.

At the time, the European Commission said it had “strong concerns” over the deal’s impact on UK customers, and that it could cause potential harm to “innovation in the mobile sector”.

Read also told reporters, that company was weighing up a potential investment in the newly merged Virgin Media O2, the £31 billion deal that was greenlit in April 2021 and completed in June 2021.

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