CK Hutchison and VimpelCom welcome European Commission approval of joint venture in Italy

HONG KONG and AMSTERDAM, Sept. 1, 2016

• European Commission approves CK Hutchison and VimpelCom joint venture that will own and operate their telecommunications businesses in Italy to create the leading mobile operator
• Joint venture will unlock €7 billion of investment in Italy's digital infrastructure, supporting growth and jobs across the country
• Businesses and consumers will benefit from significantly increased download speeds and 4G/LTE coverage, greater reliability and stronger competition    

CK Hutchison Holdings Ltd. ("CK Hutchison"), parent company of 3 Italia S.p.A. ("3 Italia"), and VimpelCom Ltd. ("VimpelCom"), parent company of Wind Telecomunicazioni S.p.A. ("WIND"), today welcomed the European Commission's decision to approve the 50/50 joint venture that will create the leading mobile operator in Italy.

The combined business of 3 Italia and WIND will have over 31 million mobile customers and 2.8 million fixed line customers (of which 2.5 million are fixed broadband customers). The joint venture will create a stronger new operator in Italy, drive competition and support the rapid changes in the market as demand for data and digital services increases. 

The scale and financial strength of the combined business, which will include 21,000 network sites and strong spectrum assets, will enable the company to provide world-class telecoms services to businesses and consumers across Italy. Customers will enjoy significantly improved coverage, accelerated 4G/LTE mobile broadband rollout, greater reliability and enhanced download speeds. The combined business will benefit from scale and synergies which will unlock €7 billion of investment in Italy's digital infrastructure. Further, its delivery of mobile broadband will play an important part in supporting the Italian government's goal in its Digital Italy Plan to achieve 85% take-up of 100Mbps broadband coverage by 2020. The investment will also complement the Enel Open Fibre project already supported by WIND.

Commenting on the Commission's approval, Canning Fok, CK Hutchison Group Co-Managing Director, said: "Today is a good day for businesses and consumers across Italy. This joint venture will unlock major investment in Italy's digital infrastructure, creating a telecoms company with the scale and strength to offer world-leading telecoms services with greater reliability, coverage and speed. The joint venture will ensure Europe's fourth largest telecoms market remains a leading player in the global digital economy."

Jean-Yves Charlier, Chief Executive Officer of VimpelCom, said: "The merger will create a leading and financially solid mobile operator in Italy that will benefit from substantial synergies of combining the #3 and #4 operators in the marketplace. The joint venture will also benefit from a healthier debt profile and will be in a position to deliver solid deleveraging in the medium term. On completion, the combined business will not only be good for consumers, businesses and the economy in Italy but will also deliver long-term value to its shareholders."

The combined business is expected to generate significant capex and opex benefits with a net present value, less integration costs, in excess of €5 billion. The joint revenue of both companies in FY15 was €6.25 billion and the transaction is one of the largest M&A transactions to be done in Italy since 2007. Completion is subject to obtaining national regulatory approvals. It is expected that the transaction will complete in Q4 2016.