Vodafone’s £16.5bn megamerger with Three gets green light from competition regulator

Vodafone’s mega-merger with rival network Three has received the green light from the competition regulator.

The UK Competition and Markets Authority (CMA) paved the way for the £16.5bn alliance on condition that both companies invest billions in the UK’s 5G mobile network and cap the prices of their Lower cost mobile plans.

The deal will create the UK’s largest mobile network, with 27 million customers.

The merger was fiercely opposed by competitors EE, owned by BT, and Virgin Media O2.

Vodafone will have a 51 percent stake in the new group. Three’s owner, Hong Kong-based conglomerate CK Hutchison, will own 49 per cent.

FTSE 100-listed Vodafone has the option to buy out CK three years into the deal, which is now expected to be completed in the first half of next year.

Under the terms of approval, the pair must invest a total of £11 billion over the next decade to roll out a 5G mobile network across the UK.

They must also cap the cost of some mobile tariffs and data plans for three years, and offer pre-set prices and contractual terms to virtual network operators, such as Sky Mobile and Giffgaff, that use other companies’ infrastructure.

Stuart McIntosh, chairman of the independent research group leading the investigation into the merger, said: “Having carefully considered the evidence, as well as the extensive information we have received, we believe that the merger is likely to boost competition in the mobile market of the United Kingdom”. sector and should be allowed to continue, but only if Vodafone and Three agree to implement the proposed measures.”

Vodafone boss Margherita Della Valle said the deal would create “a new force in the UK telecoms market” and provide customers with “broader coverage, faster speeds and better quality connections”.

Vodafone Shares rose 2.4 per cent or 1.66p to 71.46p.

Matthew Howett, head of Assembly Research, said that while some players, notably Sky, may try to appeal the decision through a competition tribunal, such a move would be “very close, expensive and would face a very high bar”.