Hutchison Whampoa and VimpelCom are reportedly back in talks about merging their Italian mobile units now the Hong Kong-based conglomerate has received regulatory clearance for its Irish merger.
Russia-focussed VimpelCom, owner of Wind Telecomunicazioni…
Hutchison Whampoa and VimpelCom are reportedly back in talks about merging their Italian mobile units now the Hong Kong-based conglomerate has received regulatory clearance for its Irish merger.
Russia-focussed VimpelCom, owner of Wind Telecomunicazioni (Wind Italy), has hired Morgan Stanley to advise on the deal, while Hutchison, owner of 3 Italia, has appointed Goldman Sachs, Reuters reported citing several people familiar with the matter.
While the report stated Mediobanca is also expected to have a role, TelecomFinance understands that at least for now the bank has not been formally appointed.
Hutchison, VimpelCom and Wind have declined to comment.
VimpelCom and Hutchison have contemplated merging their Italian units – Italy’s third and fourth largest mobile operators – for a while now and came close to striking an agreement last December. The European Commission’s clearance last week of Hutchison’s O2 Ireland acquisition has reportedly prompted the parties to resume talks. VimpelCom’s recent partial refinancing of Wind’s debt is also said to have been a factor.
Amsterdam-based VimpelCom announced in March that is was considering a multi-step refinancing at the indebted Italian unit. Steps included adding ‘portability clauses’ to Wind’s senior facilities agreement which allow the debt to remain in place in the event of a change of ownership.
VimpelCom has also looked at selling Wind’s towers, reportedly valued at about €500m (US$688m) to help cut debt, which currently totals about €9.5bn (US$19.9bn).
VimpelCom could decide to carry out a capital increase at Wind to increase its equity or raise cash through asset disposals before entering into a deal with Hutchison, the report cited sources familiar with the telco’s thinking as saying. Wind’s fixed-line unit Infrostrada could be a candidate for sale, the report noted, as it would likely draw interest from Vodafone and Swisscom’s Fastweb.
Hutchison first entered the mobile telecoms market in 1983 and its 3 Group Europe now operates in the UK, Sweden, Denmark and Austria as well as Italy and Ireland.
Last year, Hutchison and Telecom Italia discussed a potential tie-up, but the incumbent decided in July not to pursue the matter. After the talks ended, rumours emerged that Hutchison and Wind were discussing a potential merger.
