CK Hutchison completed a deal to acquire Veon’s 50 per cent stake in Wind Tre, giving the Hong Kong-based conglomerate sole ownership of the Italian operator.
The deal, first announced in July, was finalised on schedule after both companies said they expected to complete the transaction by today (7 September), following clearance from the European Commission (EC) last week.
Veon confirmed in a statement the deal was now closed, marking its exit from the Italian market. It will use the proceeds to reduce debt and for general corporate purposes. In closing the transaction, Veon said it will record a net gain of approximately $1.2 billion in Q3 2018.
The company’s executive chairman Ursula Burns said it was pleased to complete the sale.
“As we’ve said before, this sale not only simplifies our group structure, but also reinforces our emerging markets focus while crystalising value for shareholders, who can be confident that our dividend policy is underpinned by a strengthened balance sheet.
For CK Hutchison, the deal gives it a larger presence in the Italian market, where competition increased significantly since France-based Iliad’s entry in May.
The deal follows a merger of Veon’s (then VimpelCom) Wind entity with CK Hutchison’s 3 Italia in 2016, which gave the parent companies an equal 50 per cent ownership of the combined entity.
Upon giving its approval to the deal last week, the EC said CK Hutchison had agreed to take on sole responsibility for meeting terms set when the original merger deal was struck. It will also be required to support newcomer Iliad to maintain a level of competition in Italy required by the commission.