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  5. Official Wind – 3 Italia merger: announcement underway in London

Official Wind – 3 Italia merger: announcement underway in London



Official Wind – 3 Italia merger: announcement underway in London


After many guesses, the news is finally official: Wind And 3 Italy they will merge into a single operator, thanks to one equal joint venture.

This was communicated by the CEO of Vimpelcom (company behind Wind), Jean-Yves Charlier, during the conference that is still taking place a London and in which the financial results of the last quarter were disclosed.

The agreement will result in a new telephone operator for Italy, which will boast 31 million customers for the mobile network and 2.8 million for the fixed line. As expected, the CEO of the new company will be Maximo Ibarra, current CEO of Wind.

If you are curious to know more, the event is still ongoing and you can follow it live at this address, while below you will find the press release.

Press release

CK Hutchison and VimpelCom sign an agreement to combine their telecommunications activities in Italy

The integrated activities of 3 Italia SpA and Wind Telecomunicazioni SpA (WIND) will have over 31 million mobile customers and the strength and size to lead the competition in the fourth largest TLC market in Europe

(6 August 2015, Hong Kong and Amsterdam) – CK Hutchison Holdings Limited (“CK Hutchison”), the controlling company of the Italian mobile operator 3 Italia, and VimpelCom Ltd. (“VimpelCom”), the controlling company of WIND, have reached an agreement for a 50/50 joint venture for the management of their telecommunications activities in Italy.

Through the integration of their activities, 3 Italia and WIND will acquire the size and efficiency necessary to continue to offer innovative TLC services at competitive prices and to compete even more effectively on the Italian market. The integration of the two networks, combined with further significant investments, will guarantee Italian mobile customers an unrivaled network quality and accelerate the development of mobile and fixed high-speed broadband services in the country. Italian consumer and business customers will benefit from the significant improvement in LTE coverage, as well as from the increase in download speed, network reliability and even more advanced services.

With over 31 million mobile customers and 2.8 million fixed customers (of which 2.2 million broadband), the integration is expected to achieve efficiencies, both Capex and Opex, for a current value of over 5 billion euros at net of integration costs. The total revenues of the two companies in 2014 amounted to € 6.4 billion. The deal represents the largest M&A operation in Italy since 2007 *.

Commenting on the agreement, Canning Fok, Co-Group Managing Director of CK Hutchison, says: “This transaction represents a milestone for our business in Italy. The merger of 3 Italia and WIND will create a financially solid and efficient operator, capable of competing at a high level in the market. This joint venture will give the new operator the size and strength to offer Italian customers, both business and consumer, an excellent network with greater 4G coverage and higher speed. This agreement confirms CK Hutchison’s continued confidence in the Italian economy and its commitment to developing a nationwide digital service infrastructure ”.

The joint venture holding company (Hutchison 3G Italy Investments S.à.rl (the “JV Holdco”)) will own 3 Italia and WIND, while CK Hutchison and VimpelCom will indirectly control 50% of the shares in the JV. At the conclusion of the transaction, there will be no obligation for either of the two parent companies to contribute additional funds.

Alexei Reznikovich, Chairman of the Supervisory Board of VimpelCom, comments: “We are very satisfied with the partnership that VimpelCom and CK Hutchison have reached in Italy. We believe this transaction is very important to VimpelCom and its shareholders in terms of creating value. The transaction will allow VimpelCom to significantly improve its capital position. We are also proud that the transaction was unanimously approved by the VimpelCom board ”.

VimpelCom and CK Hutchison have established a clear governance structure to ensure a successful joint venture with a management team supported by a board of directors consisting of 6 managers, 3 for each of the two parent companies. The Chairman of the Board of Directors will be appointed alternately by the two companies every 18 months and his vote will be decisive on some fundamental business issues.

The new company will be led by Maximo Ibarra, current CEO of WIND. Vincenzo Novari, current CEO of 3 Italia, upon completion of the transaction, will be appointed senior adviser of CK Hutchison for Italy and will also be a member of the board of directors of the JV for CK Hutchison. Dina Ravera, current COO of 3 Italia, will lead the integration process and will assume an important role in the top management of the JV. Stefano Invernizzi, current CFO of 3 Italia, will become CFO of the new company.

Commenting on the agreement, Jean-Yves Charlier, CEO of VimpelCom, said: “This is an epochal operation for the Italian market. The two companies will become the leading operator of the fourth largest TLC market in Europe, a convergent player capable of accelerating investments in the network, services and digital innovations. At the same time, the agreement represents a milestone for both shareholders thanks to the synergies between the two companies which in the long term will provide significant value to shareholders ”.

Completion of the transaction, subject to approval by regulatory bodies, including the European Antitrust Authority, is expected to be completed within 12 months.

For more information, please refer to the press release and investor presentation at www.vimpelcom.com and CK Hutchison’s legal announcement published at www.ckh.com.hk.

*****

Notes for the press
** Wind Acquisition Holdings Finance SpA (“WAHF”): € 13.9 billion and Italy: € 799 billion. Total deal value: € 21.8 billion. WAHF is the holding company of WIND.

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