Li Ka-shing’s CK Hutchison to form new Italian telecoms company with private-equity firm EQT
- Hong Kong conglomerate’s Wind Tre will transfer its active network equipment and wholesale mobile and wholesale fixed communications services business in Italy to new company
- The new firm will have an enterprise value of US$3.7 billion
The Hong Kong conglomerate’s Italian mobile business Wind Tre will transfer its active network equipment and wholesale mobile and wholesale fixed communications services business in Italy to the new company as part of the transaction.
The new firm will be 60 per cent owned by EQT’s infrastructure business and 40 per cent owned by CK Hutchinson’s telecoms arm and have an enterprise value of €3.4 billion (US$3.7 billion).
“This is part of our group’s ‘asset-light strategy’ for us to recoup the cost of our network investment,” Canning Fok, CK Hutchison’s group co-managing director, said in a statement. “Wind Tre will benefit from having a partner to own and maintain a state-of-the-art network, which will benefit our customers while having certainty on its cost base.”
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The new company will own and operate Italy’s largest mobile network and have a portfolio of assets that include radio antennas, base stations, a transport network and associated contracts, EQT said. The network covered 67 per cent of Italy with 5G reception at the end of 2022.
The transaction is subject to regulatory approvals and is expected to close within nine months. Wind Tre will sign a long-term service agreement and serve as an anchor tenant for the new company, which will have separate management independent of Wind Tre.
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Following the transaction, Wind Tre will focus on servicing its retail customers in Italy and look to expand its revenue stream beyond its core retail offering of fixed and mobile services, CK Hutchinson said.
The deal marks the latest move by CK Hutchinson, whose businesses includes port operations, infrastructure, retail and telecommunications, to reshape its mobile businesses around the world.
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CK Hutchison also said in March that it was in active discussions regarding potential deals involving its businesses in Denmark and Sweden, with The Financial Times reporting it was in talks with Scandinavian telecommunications company Telenor.