Vodafone Group Plc and CK Hutchison Holdings Ltd. agreed to combine their UK mobile businesses in a deal that will create the biggest wireless company in the country if it passes muster with regulators.
Instead of contributing cash, Vodafone and CK Hutchison’s local unit, Three UK, have agreed to take on £6 billion in debt. Vodafone and Three compete against larger rivals BT Group Plc and Virgin Media O2 – which is jointly owned by Liberty Global Plc and Telefonica SA after they merged their British businesses in 2021. Unlike Vodafone and Three, BT and VMO2 also own fixed networks to sell consumer broadband.
The transaction will now enter months of tense regulatory review. Watchdogs rejected a similar proposal that would have combined Three with O2 in 2016. In a ruling before the UK left the European Union, the EU blocked the deal on antitrust grounds in an ongoing case that’s since been challenged in the courts.