(May 5): Vodafone Group plc is buying CK Hutchison Holdings Ltd's stake in the UK’s largest mobile operator in a deal worth £4.3 billion, as CEO Margherita Della Valle accelerates a plan to consolidate in the company’s biggest markets.
VodafoneThree, which was created last year by a merger of UK operators owned by CK Hutchison and Vodafone, will pay the Hong Kong-based company in cash to buy out its 49% stake in the group, according to a filing on Tuesday. After the combination, Vodafone had the option to take over the business within a three-year window.
CK Hutchison’s shares rose as much as 2.8% in Hong Kong and Vodafone’s shares were up 1.2% in London on Tuesday.
Since becoming CEO in 2023, Della Valle has committed resources to Vodafone’s key markets while divesting from others to overhaul a telecommunications empire that at one point stretched from the US to Africa. Her efforts put the company at the leading edge of a push to consolidate the European telecommunications sector, where profits have lagged due to fragmented markets and intense competition.
“Now is the right time for the deal” because it enables faster integration, Vodafone said in a statement, adding that the early exit will make it easier to achieve a target of £700 million in annual cost savings by the end of 2030. The transaction is expected to complete in the second half of 2026, subject to approvals from the UK authorities.
For CK Hutchison, selling the VodafoneThree stake is the latest effort by billionaire Li Ka-shing’s conglomerate to shed major assets as it seeks to unlock value and boost shareholder returns. The group is also pursuing a sale of most of its ports and weighing a potential listing of its retail arm. The series of deals comes amid rising geopolitical uncertainty, giving the company added incentive to build a war chest for future growth.
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“It aligns with the ongoing strategy to reposition the firm in global sectors, especially those with higher competition, lower margins and potential geopolitical risks,” said Gary Ng, senior economist at Natixis SA.
This is a “win-win” for the group and its partners, CK Hutchison co-managing directors Frank Sixt and Dominic Lai said in a statement. “It generates substantial cash proceeds to the group and crystallises solid value for the group from our investment.”
Della Valle has focused on simplifying operations in its main markets of the UK and Germany while selling off non-core assets since taking over Vodafone. She has divested businesses in Italy and Spain. In February, Liberty Global Ltd agreed to buy out Vodafone from the Dutch telecommunications company VodafoneZiggo.
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“This looks like a sensible move to increase ownership of a good asset with a strong spectrum position at a sensible price. It might delay further share buybacks by a year but this is in Vodafone’s best longer-term interest,” New Street Research analyst James Ratzer said.
CK Hutchison operates telecom businesses in several European markets with the 3 brand. It also has a controlling stake in Hutchison Telecommunications Hong Kong Holdings, which provides mobile services in the city and Macau under its brand and runs telecom services in Australia and Southeast Asia via joint ventures.
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