Hong Kong billionaire Li Ka-shing is to offload his £4.3bn stake in VodafoneThree in the wake of the merger of the two telecoms giants.
Mr Li’s CK Hutchison, which currently owns 49pc of the UK mobile network operator, has struck a deal with Vodafone to sell its holding by cancelling shares.
The move, which will give Vodafone full control of the company, is expected to be completed in the second half of the year.
CK Hutchison owned Three before its merger with Vodafone, which was first announced in 2023.
The deal was subject to a lengthy review process, in part after unions and China-sceptic MPs raised concerns about handing critical national infrastructure and sensitive government contracts to a Hong Kong-based tycoon.
Despite disquiet, the merger passed a national security review. The Competition and Markets Authority also approved the deal after Vodafone and Three made a number of legally binding commitments to address concerns about reducing the number of UK mobile network operators from four to three.
These included a pledge to invest £11bn to improve patchy mobile coverage over the decade following the merger.
The two companies have previously said Vodafone would have the option to buy out Three’s stake after three years. But bosses said today that they had struck the deal early as the merger was moving ahead of plan.
Frank Sixt and Dominic Lai, co-managing directors at CK Hutchison, described the VodafoneThree sale as a “win-win” for the company and its partners.
They added: “It generates substantial cash proceeds to the group and crystallises solid value for the group from our investment.”
Vodafone said taking full control of the mobile network would enable it to achieve £700m in annual cost savings.
Margherita Della Valle, chief executive of Vodafone, said: “A year on from the merger, the team has made remarkable progress as we maximise the full potential of VodafoneThree and capture the significant synergies.
“I’m delighted that we will now have full ownership of VodafoneThree as we roll out one of Europe’s most advanced 5G networks, provide the UK’s best customer experience and drive long-term value for our shareholders.”
Kester Mann, an analyst at CCS Insight, said: “The deal is an endorsement of the strong start made by the merged company, notably in bringing the Vodafone and Three networks together. It also reinforces a widely held industry view that the Vodafone brands will eventually prevail over the Three brands.”
Growing cash pile
It marks the latest in a flurry of deals for CK Hutchison, which has been building up its cash pile through a string of recent disposals.
