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Vodafone and CK Hutchison on Wednesday entered into binding agreements to merge Vodafone UK and 3 UK, with the former holding a 51 per cent stake and CK Hutchison 49 per cent.

Current Vodafone UK CEO Ahmed Essam will become CEO of the joint business, and 3 UK CEO Darren Purkis will take on the CFO role.

Vodafone Group Chief Executive Margherita Della Valle described the merger of Vodafone UK and Three UK as being "great for customers, great for the country and great for competition".

"It's transformative as it will create a best-in-class 5G network, offering customers a superior experience. As a country, the UK will benefit from the creation of a sustainable, strongly competitive third scaled operator - with a clear 11 billion pounds network investment plan - driving growth, employment and innovation," Della Valle added.

The combined business will invest 11 billion pounds in the UK over 10 years to create one of Europe's most advanced standalone 5G networks, in full support of UK government targets.

"From day one, millions of customers of Vodafone UK and Three UK will enjoy a better network experience with greater coverage and reliability at no extra cost, including through certain flexible, contract-free offers with no annual price increases, and social tariffs," the companies said in a statement.

By having a best-in-class 5G network in place sooner, the merger will deliver up to 5 billion pounds per year in economic benefit by 2030, create jobs and support digital transformation of the UK's businesses.

Every school and hospital in the UK will have access to standalone 5G by 2030.

"No cash consideration to be paid, with the Vodafone UK and Three UK businesses contributed with differential debt amounts at completion to achieve MergeCo ownership of 51:49 between Vodafone and CK Hutchison," said the statement.

These are expected to amount to more than 700 million pounds of annual cost and capex synergies by the fifth full year post-completion, with an implied NPV of over 7 billion pounds.

The transaction is expected to close before the end of 2024, subject to regulatory and shareholder approvals.

"Together, we will have the scale needed to deliver a best-in-class 5G network for the UK, transforming mobile services for our customers and opening up new opportunities for businesses across the length and breadth of the UK," said Canning Fok, Group Co-Managing Director of CK Hutchison.