UK-based Vodafone Group is reported to be in discussions over the possible merger of its domestic unit, Vodafone UK, with rival British cellco Three UK, which is owned by Hong Kong’s CK Hutchison. According to The Financial Times, which cites ‘people with direct knowledge of the matter’, discussions regarding a possible deal come as Vodafone Group faces pressure from activist investor Cevian Capital to simplify its business, pursue deals in national markets and improve returns.
While the report noted that the exact structure of any deal being discussed between Vodafone Group and CK Hutchison could not be ascertained, it did highlight that the former’s CEO Nick Read has on previous occasions indicated that he is focused on pursuing combinations more than outright purchases, given his ambitions to reduce Vodafone Group’s debt.
With discussions between Vodafone Group and Three UK having previously been reported to have taken place last year, these did not lead to a deal. Meanwhile, the Financial Times said that Vodafone Group had declined to comment on the latest rumoured development, while CK Hutchison did not respond to a request for comment.