Hutchison 3G UK to acquire Transvision Investments

Mobile operator Three UK is acquiring UK Broadband, the company behind the Relish wireless network, for GBP 300.00 million.

The communications group expects the purchase to enhance its customer offerings, while adding about 15,000 more customers.

Media reports suggested this was Three’s first step into the home broadband market and comes after it abandoned plans to take over larger rival O2 for GBP 10.25 billion last year.

In May 2016, the multi-billion-pound acquisition was shut down by European regulators over strong concerns the deal would lead to less choice and higher prices for customers.

Three has said the acquisition of UK Broadband will need to fulfil a number of conditions before completion, which is currently slated for mid-2017.

Under the terms of the transaction, GBP 250.00 million of the consideration will be in cash, with GBP 50.00 million to be issued in loan notes.

Dave Dyson, chief executive of the acquiror, said: “UK Broadband gives us an opportunity to expand our ambition to provide high quality and great value internet connectivity for UK consumers.”

The two firms are already connected as Three is owned by CK Hutchison, which is controlled by Asia’s richest man Li Ka-shing, while the target is held by his son Richard Li’s telecommunications group PCCW.

According to the Financial Times, the Hong Kong-based holding company has been interested in the UK market since 2004, when it acquired a licence to operate WiMax.

The group initially launched its service as Now Wireless but changed its name in 2014 to Relish, which offers line rental-free broadband service in London.

Relish urges its customers to get rid of their fixed-line broadband provider in favour of a router that connects wirelessly to UK Broadband’s own network of radio masts.

Companies in the communications industry have been consolidating in recent, years with 897 deals targeting wireless telecommunication providers globally since the beginning of 2015, according to Zephyr, the M&A database published by Bureau van Dijk.

Zephyr shows the largest of these deals involved Hutchison 3G Italy Investments buying Wind Telercomunicazioni and 3 Italia for about EUR 21.80 billion last year.

© Zephus Ltd

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