Wind, 3 merger back on the agenda; Hutchison buoyed by Irish approval

5 Jun 2014

Hutchison Whampoa has resumed talks with Russian telecoms group Vimpelcom Ltd over the possibility of merging their respective Italian mobile firms, Reuters reports, citing several people familiar with the situation. Encouraged by its progress in Ireland – where the European Union (EU) granted its formal approval to the takeover of mobile operator O2 Ireland by rival Hutchison 3G Ireland late last month – the Hong Kong based company intends to redouble its efforts in securing a tie up between 3 Italia and its larger rival Wind Telecomunicazioni (Wind Italy). As such, Vimpelcom has hired Morgan Stanley to advise on the deal, while Hutchison is working with Goldman Sachs. Mediobanca is also expected to have a role, sources have indicated.

The parties have held on-off talks for more than six months and came very close to agreeing a deal in December, the sources told Reuters. The clearance of Hutchison’s O2 Ireland acquisition, together with a partial refinancing of Wind’s debt, has now created fresh momentum, which could help to push a deal through.

According to TeleGeography’s GlobalComms Database, as at 31 March 2014, 3 Italia claimed a 10.8% share of the wireless market, compared to Wind’s 24.3% share of the spoils. If combined, the enlarged operator would hold a 35.1% market share, automatically leapfrogging both Telecom Italia Mobile (TIM, 34.2%) and Vodafone Italy (30.7%).

Italy, 3 Italia (H3G Italia), CK Hutchison, VEON, WINDTRE (incl. Wind and 3 Italia)