Vimpelcom Ltd and CK Hutchison Holdings – the new company in control of Hutchison Whampoa’s telecoms assets – are close to combining their wireless businesses in Italy to create the country’s largest mobile operator by subscribers, Bloomberg reports citing people familiar with the matter. After the May 2015 confirmation that the two parties were in exploratory talks over a combination, sources have now suggested that Hutchison and Vimpelcom are putting the final touches on a deal, with an announcement possible next week. The owners are discussing a possible capital increase of EUR2 billion (USD2.4 billion) for the enlarged entity, two of the people said, while bringing in a private equity investor is also an option, another source noted. However, no final agreement has been reached and a transaction could still unravel.
If a merger is completed, the combination of Vimpelcom’s Wind Telecomunicazioni (Wind Italy) and Hutchison’s 3 Italia unit, would create a carrier with 31.29 million customers (as of 31 March 2015), leapfrogging market leader TIM, which claimed 30.14 million mobile users at the same date. For its part, rival operator Vodafone presided over a user base of 25.17 million at the end of the first quarter of 2015.