Vodafone UK merger with Three gets go-ahead from CMA

Investing.com — The UK Competition and Markets Authority has approved the merger of Vodafone (NASDAQ:VOD) UK and Three, a move set to reshape the country’s telecom landscape. 

Following an extensive 18-month review, the CMA concluded that the merger would enhance competition and drive significant investment in the sector, marking a pivotal moment for the mobile industry.

Vodafone and Three announced their plans to combine operations in June 2023, seeking to address the growing demand for advanced network infrastructure. 

The merger will see the companies invest £11 billion into developing the UK’s most extensive and advanced 5G network, aiming to deliver improved connectivity to more than 50 million customers. 

The network will cover 99% of the population, promising faster speeds, better reliability, and the capacity to handle increasing data usage.

The companies stated that the upgraded network would support emerging technologies such as artificial intelligence and play a crucial role in boosting businesses, enhancing public services, and bridging the digital divide. 

“The merger is a once-in-a-generation opportunity to transform the UK’s digital infrastructure,” Vodafone said in a statement.

The CMA said the merger’s potential to spur competition among mobile providers in the long term, benefiting millions of users reliant on mobile services. 

The investment, fully funded by the companies without public support, is expected to place the UK at the forefront of European connectivity, contributing to its economic and technological growth.

With the formal completion of the merger expected by mid-2025, Vodafone will initially hold a 51% stake in the joint venture. 

After three years, it may acquire the remaining 49% from Hutchison, the parent company of Three, under a predefined option agreement.