Remedies imposed by the EC when Wind Tre was created mean no deal is possible before 2026; dropping from four to three operators could be opposed by regulators
The Hong Kong conglomerate CK Hutchison and the Iliad Group, controlled by the French billionaire telecoms tycoon Xavier Niel, are in talks to merge their operations in Italy, according to Reuters. The news agency cited three unnamed sources.
CK Hutchison’s operating company in Italy is Wind Tre, itself the product of a merger between Three Italy and Wind, an Italian telecoms company, at the end of 2016. CK Hutchison has been the sole shareholder since September 2018.
Wind Tre is the third-largest mobile operator in Italy with a market share of 24%: Iliad is fourth with 11%, according to Italian regulator AgCom.
The European Commission allowed the Wind Tre merger to go ahead but gave Iliad permission to enter the Italian market in 2018 as an antitrust remedy. Other conditions put in place at the time by the Commission would prevent Wind Tre taking over Iliad until at least 2026. However there have been suggestions the deal could be a joint venture.
Should such a deal be allowed to progress, it would reduce the number of operators in Italy from four to three – following the pattern set in the UK when Three UK recently merged with Vodafone. However four-to-three consolidation has been resisted in the European Union.
Group values
Reuters reckons Niel’s unit, which operates under the Free brand in Italy, could be worth more than €3 billion: Iliad valued its Italian operations at €4.45 billion in December 2023, when it submitted a bid for Vodafone Italia, which was rebuffed. Earlier this year Iliad also sought a tie-up with Telecom Italia Mobile (TIM).
In March, Reuters reported that CK Hutichison was considering divesting itself of its telecoms assets globally, which were estimated at being worth between £10 billion and £15 billion (€11.37 billion and €17 billion).
The telecoms businesses are the most valuable assets in CK Hutchison’s portfolio, accounting for a quarter of group operating profit in 2024. Italy and Britain are the top contributors to the European telecoms business; Ireland and Sweden are the fastest growing markets.
