Thursday 14 December 2017

Hutchinson Whampoa looks to merge Italian assets with VimpelCom

Li Ka Shing also owns telecoms giant Hutchison Whampoa. Photo credit: PETER PARKS/AFP/Getty Images
Li Ka Shing also owns telecoms giant Hutchison Whampoa. Photo credit: PETER PARKS/AFP/Getty Images

Daniele Lepido and Manuel Baigorri

Billionaire Li Ka-shing's Hutchison Whampoa has intensified negotiations with VimpelCom to combine their wireless assets in Italy, according to two people familiar with the matter.

The companies have made progress in resolving disagreements over ownership structure, with talks focusing on Hutchison's 3 Italia unit - the smaller of the mobile-phone carriers - buying VimpelCom's Wind Telecomunicazioni, said one of the people, asking not to be identified because the deliberations are private. No agreement has been reached and a deal could still fall apart.

The combined businesses, with more than 30 million mobile customers and revenue of €6.7bn in 2013 revenue, would challenge market leader Telecom Italia. A merger would reduce the number of wireless networks in Italy to three from four, following similar moves in Germany, Ireland and Austria.

In the UK, Hutchison started exclusive talks last month to acquire Telefonica's O2 unit for as much as £10.25bn.

A spokesman for Hong Kong-based Hutchison declined to comment on the talks, as did a spokesman for Amsterdam-based VimpelCom, whose shareholders include Russian billionaire Mikhail Fridman and Telenor of Norway.

Italy's 'Il Giornale' reported that managers of the two telecom companies' shareholders met yesterday in London to work out details of a deal, which could be announced as early as today. Telecom Italia is the country's largest carrier. The company reported €16.2bn in 2013 sales from its domestic operations. 3 Italia is the smallest of Italy's four wireless carriers, behind Telecom Italia, Vodafone Group's local unit and Wind.

Merger talks between 3 Italia and Wind were revived last year, with the carriers unable to reach an agreement because Hutchison wanted 3 to control any enlarged entity, while VimpelCom favored a 50-50 partnership.

Irish Independent

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