Vodafone has agreed to merge British operations with Three UK, owned by Hong Kong-based CK Hutchison, to accelerate the rollout of faster 5G connectivity, the companies have jointly announced.
Huawei, a major supplier of equipment for mobile telephone networks has been banned in the UK, which has greatly hampered 5G expansion across the country.
Vodafone and CK Hutchison said in a joint statement that a new combined group is seen as having a value of £16.5 billion ($21 billion) following the deal's completion due by next year.
"The merger is great for customers, great for the country and great for competition," said Vodafone chief executive Margherita Della Valle, who recently cut 11,000 jobs at the group.
The merger will create Britain's biggest mobile operator with about 27 million customers, overtaking BT's EE and VM O2, the latter owned by Telefonica and Liberty Global.
The deal is expected to face intense scrutiny from regulators, who have previously opposed deals that stifle competition.
The merger will lead to a network investment of £11 billion over ten years, the company’s statement said.
CK Hutchison has maintained that the tie-up will have the best-in-class 5G network for the UK.
The transaction will see Vodafone take 51% of the combined group and CK Hutchison 49%.
Separately, e& and Vodafone Group Plc have agreed to a strategic relationship that will bring certain aspects of the two operators’ businesses closer together across Europe, the Middle East and Africa.
As part of this strategic relationship, e& and Vodafone have entered into a relationship agreement that establishes e& as a cornerstone shareholder of Vodafone (the “Relationship Agreement”). This is the next phase in a strategic relationship that began in May 2022, when e& made its original investment in Vodafone.