Vimpelcom Ltd and CK Hutchison Holdings Ltd (formerly Hutchison Whampoa) the parent companies of Wind Telecomunicazioni (Wind Italy) and 3 Italia respectively, have agreed to form a 50/50 joint venture (JV) that will own and operate their telecoms businesses in Italy. With over 31 million mobile customers and 2.8 million fixed line customers (of which 2.2 million are broadband users), the combined business is expected to generate significant CAPEX and OPEX benefits.
The joint venture holding company, Hutchison 3G Italy Investments (AKA the ‘JV Holdco’), will own both telcos, while CK Hutchison and Vimpelcom will each indirectly hold 50% of the shares in the JV. After the transaction is completed, there will be no additional obligations to contribute funds by either parent company. The combined business will be led by Maximo Ibarra, the current CEO of Wind. Completion is subject to obtaining regulatory approvals including European Union (EU) competition approval. It is anticipated that the deal will close within twelve months.
Canning Fok, co-group managing director of CK Hutchison, commented: ‘This deal represents a major milestone for our Italian business. The combination of 3 Italia and Wind will create a financially sound and efficient operator that is able to compete head-on in the market place. This joint venture will give the combined business the scale and strength to offer Italian consumers and businesses a state of the art network with greater 4G coverage and higher speeds’.