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Hutchison, VimpelCom in Italian mobile assets merger talks – report

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Hong Kong-based Hutchison Whampoa and Dutch operator group VimpelCom are in advanced talks over an agreement to merge their respective Italian mobile assets Three Italy and Wind, a report has claimed.

According to the article, published by the Financial Times, the two parties are nearing the end of talks that have lasted almost a year- apparently marking one of the longest running negotiations seen in the European telecoms market. This drag in the talks, the report claimed, is partly due to disagreements over price and the exact ownership structure of the merger.

But citing unnamed sources with knowledge of the matter, the report said a deal under which Hutchison would end up with a slightly bigger share (51%) is now close to being agreed. However, a final decision is still apparently likely to be weeks away.

The latest rumours follow similar recent activity from Hutchison’s part in other European markets, including the UK where it is in confirmed talks with Telefónica over a merger of Three and O2. The group has already previously acquired Telefónica’s Irish operations, and further European consolidation has been widely expected for some time.

Three is the smallest of four mobile operators in Italy, Wind being the third behind the second largest Vodafone and number one being Telecom Italia. According to subscriber figures from analysts Ovum (as of December 2014), the merger would take the new group pretty much on par with Telecom Italia as both would have around 30 million customers.

However, even if Hutchison and VimpelCom manage to come to an agreement, the deal would have to be approved by European regulators who have recently indicated deals that reduce the number of operators in a country may not be easily passed. But if history is anything to go by it is very much possible as similar deals have been given the go-ahead in recent times in Germany and Austria, albeit with concessions.

Telecoms.com’s news coverage is sponsored by NEC.

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