The recently merged mobile and broadband operator VodafoneThree (Vodafone and Three UK) have today announced that Vodafone has reached an agreement to “buy out” CK Hutchison (Three) from the joint venture for £4.3 billion (€4.9bn) in cash via a cancellation of shares. The deal will increase Vodafone Group’s pro forma net debt, but give them full control.
Just to recap. VodafoneThree has a post-merger plan to invest £11bn into upgrading the UK’s 5G mobile infrastructure and coverage over the next decade (here, here and here). The combined business has also previously stated that it aspires to reach more than 99.95% of the UK population with their 5G Standalone (5GSA / 5G+) network by 2034 and push fixed wireless access (mobile home broadband) to 82% of households by 2030, among other things.
NOTE: Until today VodafoneThree was a private company – 51% owned by Vodafone and 49% owned by CK Hutchison Holdings (Three UK). It encompasses all businesses and assets, including Vodafone UK, Three UK, VOXI, SMARTY and Talkmobile.
The operator today states that “significant progress has been made in integrating the two businesses” since the merger, which is said to have “led to considerable improvements in network quality” and “overall customer experience and loyalty across all of our brands” – much of which has so far been delivered ahead of schedule, although there’s a lot more left to complete on this front.
Suffice to say that today’s agreement doesn’t change their merger plans or commitments (network upgrades etc.) and the operator still expects to realise £700m annual cost and capital expenditure synergies by full year 2030. But Vodafone also says they believe “now is the right time to take full ownership of VodafoneThree, enabling us to move at an even faster pace to transform the UK’s digital infrastructure and realise value for our shareholders“.
Margherita Della Valle, Chief Executive of Vodafone Group, said:
“A year on from the merger, the team has made remarkable progress, as we maximise the full potential of VodafoneThree and capture the significant synergies. I’m delighted that we will now have full ownership of VodafoneThree as we roll out one of Europe’s most advanced 5G networks, provide the UK’s best customer experience and drive long-term value for our shareholders.”
According to the announcement, Max Taylor will continue in his role as Chief Executive Officer (CEO) of VodafoneThree, supported by the existing VodafoneThree leadership team. There will be no change to VodafoneThree’s multi-brand strategy, ensuring continuity for customers across all brands. Completion is still subject to the receipt of approvals under the UK National Security and Investment Act, but that’s more of a formality for this sort of change and the transaction should complete during the second half of 2026.
The transaction is however expected to increase Vodafone Group’s pro forma net leverage by 0.4x. At completion of the merger, CKHGT contributed its business with £1.7bn of debt and Vodafone contributed its business with £4.3bn of debt. Since completion of the merger the parties have contributed £0.8bn of equity and as at 31st March 2026, net debt was £5.08bn. The transaction implies an enterprise value for VodafoneThree of £13.85bn. Vodafone will fund the transaction from existing cash resources.
The move will naturally help CK Hutchison to reduce their own debts, although over time we wouldn’t be surprised if Three’s brand ultimately ends up being phased out or downgraded to that of a more vanilla virtual operator on the network.