CK Hutchison and VimpelCom closed their deal to merge their local units in Italy, in a tie-up that creates the country’s largest operator.
In a statement, the companies said Hutchison’s 3 Italia and VimpelCom’s Wind are now formally under the joint ownership of both groups, sealing a joint venture deal that was first announced in August 2015.
The merger, one of the largest in Italy since 2007, was on track to complete after receiving final approval from the ministry of economic development in Italy last month.
It was also subject to a rigorous approval process at European level, with the European Commission (EC) eventually giving the nod to the merger in September.
Key to the approval was the two companies’ commitment to sell assets to newcomer Iliad. The French company inked a contract with Hutch and VimpelCom in July that will see it enter the Italian market as the country’s fourth operator.
Canning Fok, CK Hutchison’s co-managing director, said completing the deal “marks a major milestone in the development of Italy’s digital economy”.
“Not only will this transaction create a strong new competitor in the Italian market, it will also provide significant additional investment to drive development of Italy’s digital infrastructure.”
VimpelCom’s CEO Jean Yves Charlier added that Italian customers will begin to “see real benefits in terms of call quality and strengthened data services as soon as 2017”, as the companies integrate networks and engineering capabilities.
Maximo Ibarra, the current CEO of Wind, has been tasked with heading up the joint venture. This isn’t surprising, given Ibarra’s Wind has twice as many customers as the 3 operation. Vincenzo Novari, CEO of 3 Italia, will be appointed as special adviser to CK Hutchison.
VimpelCom’s Wind and Hutchison’s 3 Italia were respectively the third and fourth operators in Italy, and will assume top spot combined, with approximately 32 million mobile customers and 2.7 million fixed-line customers.
Rival TIM has 30 million customers while current number two Vodafone boasts around 25 million.