Hutch, VimpelCom set to restart stalled merger talks in Italy – report

Hutch, VimpelCom set to restart stalled merger talks in Italy – report

18 FEB 2015
Hutchinson Whampoa

Hutchison Whampoa and VimpelCom are back in contact about merging their respective Italian units, according to Il Giornale.

Executives from the two companies held an initial meeting at the London offices of Deutsche Bank earlier this week.

The two companies have conducted on-off talks about merging their Italian units, 3 Italia and Wind, since December 2013. The most recent bout of talks broke down last autumn.

Past stumbling blocks are thought to have been Wind’s debt level of about €9.5 billion, as well as who has control of the merged entity. Hutchison is said to want a majority stake, while VimpelCom preferred a 50-50 division. Finally, agreeing on valuation criteria has also proved tricky.

Hutchison is simultaneously in exclusive talks about buying O2 in the UK which, when merged with 3 UK, would create the country’s largest operator, in terms of mobile connections.

Indeed, comments made by Hutchison Whampoa’s finance director, Frank Sixt, on the sidelines of announcing exclusive talks with O2, pointed to his interest in Italian consolidation.

Similarly, if Hutchison could pull off a merger with Wind, it would create the largest operator in Italy, marginally ahead of Telecom Italia. Wind and Hutchison are currently the country’s third and fourth placed operators.

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Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

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