Hutchison Whampoa and VimpelCom are close to finalising a merger of their respective Italian mobile phone units, 3 Italia and Wind Telecomunicazioni, to create what would be Italy’s largest mobile operator, according to unnamed sources cited by Bloomberg. An announcement about the merger could arrive as early as next week, said two of the sources, with the owners discussing a possible capital hike of EUR 2 billion for the combined entity. Another source suggested the parties may bring in a private-equity investor. The news comes over two months after the companies announced they were in discussions regarding a possible equal joint venture. However, no final agreement has yet been reached and the transaction could still fall apart, with issues such as possible asset sales still to be ironed out, said the sources.
If an agreement is reached, the combined entity would have over 30 million customers and 33.3 percent of the Italian mobile market, according to 2014 year-end data from communications regulator AgCom, compared with 32.1 percent for Telecom Italia and 27.5 percent for Vodafone. A merger between Wind and 3 Italia would also reduce the number of major mobile operators in the country to three, as has already occurred in Germany, Spain, Austria and Ireland.
The report also suggests that Wind may look to divest Infostrada, its fixed-line business, as well more mobile towers as part of the deal. In March the company sold a 90 percent stake in its mobile tower unit Galata to Spain’s Cellnex Telecom. Companies such as Telecom Italia’s mobile-tower unit Inwit have already expressed an interest in any tower assets divested by 3 Italia or Wind, said the report.
