Now the real challenges begin – integrating two business, two networks and two cultures while investing £11bn over the next decade
Vodafone Group and CK Hutchison Group Telecom Holdings Limited (CKHGT), a wholly owned subsidiary of CK Hutchison Holdings Limited have finally completed the merger of Vodafone UK and Three UK on 31 May 2025.
The two agreed the merger terms in June 2023 and received approval, with remedies, from the Competition and Markets Authority (CMA) in December 2024.
The combined business, named VodafoneThree, is 51% owned by Vodafone and 49% by CKHGT. Vodafone will fully consolidate VodafoneThree in its financial results. The Chief Executive Officer is Max Taylor, who currently leads Vodafone UK. Three UK’s Darren Purkis is appointed Chief Financial Officer.
VodafoneThree will invest £11 billion over the next 10 years, which it claims will create “one of Europe’s most advanced 5G networks, giving millions of customers and businesses up and down the country a vastly superior mobile experience”.
No more excuses?
Kester Mann, CCS Insight, commented, “Legal completion is the final hurdle of a long and challenging journey to officially join forces. It cements one of the most important structural changes in the history of UK mobile and creates a new market leader with a combined 29 million customers.
“The merging parties have little time to celebrate. Now, the hard work really begins as they set about implementing the many connectivity improvements they’ve long promised. For many UK mobile users that have struggled for too long with poor signal, the upgrades can’t come soon enough.
“The merged company’s biggest task will be to combine two established mobile networks that bring a complex assortment of different suppliers and technologies. CEO Max Taylor will also face difficult decisions in areas such as brand, retail, jobs and market positioning. Rivals should be ready to pounce if any stage of the integration goes awry.”
He added, “The green light will be looked on positively by the broader European telecom sector, which has been clamouring for greater leniency on mergers for years. It may give operators in other markets fresh confidence to strike new deals of their own.”
In its first year, VodafoneThree plans to invest £1.3 billion in capex to accelerate network deployment. As previously stated in outlining the business case for the merger, the combined business is expected to deliver cost and capex synergies of £700 million pa by June 2030.
The transaction is also expected to gradually increase Vodafone’s adjusted free cash flow from financial year 2029 onwards.
Group growth strategy
Margherita Della Valle, Vodafone Group Chief Executive, has plotted a course for the group of pulling out of unprofitable markets, such as Italy and Spain, which has been expedited, and consolidation to improve shareholder value and profit margins.
She stated, “The transaction completes the reshaping of Vodafone in Europe, and following this period of transition we are now well-positioned for growth ahead.”
Canning Fok, Deputy Chairman of CK Hutchison and Executive Chairman of CKHGT, said: “As we have demonstrated in other European markets, scale enables the significant investment needed to deliver the world-beating mobile networks our customers expect, and the Vodafone and Three merger provides that scale. In addition, this transaction unlocks significant shareholder value, returning approximately £1.3 billion in net cash to the Group.”
