Italy approves CK Hutchison-VimpelCom mobile network merger

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Exterior view of a 3 Italia mobile phone store operated by CK Hutchison in Rome. The Hong Kong company and VimpelCom have received final approval to form a joint venture that would create the largest mobile network operator in Italy. Photo: Bloomberg

Published: 6:15pm, 25 Oct 2016Updated: 10:34pm, 25 Oct 2016

CK Hutchison Holdings and Amsterdam-based VimpelCom have received final approval from the Ministry of Economic Development in Italy to form a joint venture that would create the largest mobile network operator in that country.

In a joint statement on Tuesday, CK Hutchison and VimpelCom said the government go-ahead means they are on track to complete the merger of their respective mobile businesses, Three Italia and Wind Telecomunicazioni, by the end of this year.

That deal, valued at €€21.8 billion (HK$183.97 billion), was reported last year to be one of the largest mergers and acquisition transactions in Italy since 2007.

“The combined entity will deliver major investment into Italy’s digital infrastructure, bring benefits to consumers and businesses across Italy, and unlock significant value through synergies,” CK Hutchison and VimpelCom said.

The Italian government’s approval comes nearly two months since the European Commission agreed to the two companies’ proposed 50-50 joint venture, following an investigation that it initiated in March.

Margrethe Vestager, the European Commissioner for Competition, said on September 1 that CK Hutchison and VimpelCom “offered a strong remedy that enables a new mobile network operator, Iliad, to enter the Italian market”.