Hutchison Whampoa and VimpelCom have released statements confirming negotiations to merge their respective Italian mobile phone units, 3 Italia and Wind Telecomunicazioni. "We are in discussions with Hutchison regarding a possible equal joint venture between 3 Italia SpA and Vimpelcom’s subsidiary Wind Telecommunicazioni SpA," said VimpelCom, adding that "there can be no assurances that an agreement will be signed and any transaction would be subject to, among other things, achieving satisfactory debt levels and obtaining all required corporate and regulatory approvals." Hutchison also issued a statement to inform shareholders and investors about "exploratory negotiations with VimpelCom". The companies have been holding on-off talks since December 2013, with Wind's net debt level and the exact split of ownership representing the main hurdles to a deal.
A merger between Italy's third-largest mobile operator Wind and fourth-placed 3 Italia would reduce the number of major operators in the country to three, as has already occurred in Germany, Austria and Ireland and is likely to happen in Spain. Wind and 3 Italia would have 33.3 percent of the Italian 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.
An earlier report in Bloomberg suggested that the companies have agreed that Maximo Ibarra, current CEO of Wind Telecomunicazioni, would head the merged entity, with 3 Italia CEO Vincenzo Novari set to become a board member and take a supervisory role at Hutchison Whampoa’s Italian businesses. However, two unnamed sources cited by Reuters said the companies are still not yet close to signing a deal, with Wind's high debts remaining an issue.
