Vimpelcom and CK Hutchison have reached an agreement to merge their Italian operators Wind and 3 Italia into a 50-50 joint venture, creating Italy's largest mobile operator. The companies first confirmed the merger talks in May and have now reached an agreement on the structure and management. The deal sees Italy the latest market to go from four to three mobile operators.
The merged entity will have over 31 million mobile customers and 2.8 million fixed customers, with annual revenues of around EUR 6.4 billion. Together they should surpass TIM to become the largest mobile operator with around a third of customers in Italy. The owners expect to realise net savings of at least EUR 5 billion on operating and investment costs thanks to the merger.
The holding company Hutchison 3G Italy Investments will own 3 Italia and Wind, and CK Hutchison and VimpelCom will indirectly hold 50 percent of the shares in the joint venture. After the transaction is completed, there will be no additional obligations to contribute funds by either parent company. Each shareholder will appoint three board members, and the chairman position will alternate every 18 months between the two owners and hold the right to a deciding vote on certain business matters.
Wind CEO Maximo Ibarra will head the new group, while 3 Italia's CEO Vincenzo Novari will sit on the holding company's board and advise Hutchison on the Italian market. 3 Italia's COO Dina Ravera will lead the merger integration process and will remain in a senior operating role in the combined business. The CFO of 3 Italia, Stefano Invernizzi will become CFO of the combined business.
The companies expect to complete the deal within 12 months. They will apply to the European Commission for regulatory clearance.
