CK Hutchison and VimpelCom join forces to pursue €7bn in Italian investments
The €21.8 billion merger will establish the biggest mobile network operator in Italy, Europe’s fourth-largest telecommunications market
CK Hutchison Holdings and Amsterdam-based VimpelCom are gearing up to push €7 billion (HK$60.42 billion) in new investments into Italy, as the two companies completed the merger of their telecommunications businesses in the country on Monday.
The close of that transaction, which combines CK Hutchison’s 3 Italia and VimpelCom’s Wind Telecomunicazioni under a 50-50 joint venture, has come two months after it received approval from the European Commission.
“Today marks a major milestone in the development of Italy’s digital economy,” CK Hutchison Group co-managing director Canning Fok Kin-ning said.
“Not only will the transaction create a strong new competitor in the Italian market, it will also provide significant additional investment to drive development of Italy’s digital infrastructure.”
The merger, valued at €21.8 billion, will establish the biggest mobile network operator in Italy, Europe’s fourth-largest telecommunications market.
It is also one of the largest mergers and acquisition deals to be completed in Italy since 2007, according to CK Hutchison and VimpelCom, who did not provide details about their investment programme.
They estimated the joint venture will generate significant capital spending and operational expenditure benefits, with a net present value – less integration costs – in excess of €5 billion.