Italian number three and four mobile operators Wind Telecommunicazioni and 3 Italia are reportedly closing in on a long discussed tie-up, with a deal possible this week.
“The companies have agreed the basic principles and main terms,” a source told…
Italian number three and four mobile operators Wind Telecommunicazioni and 3 Italia are reportedly closing in on a long discussed tie-up, with a deal possible this week.
“The companies have agreed the basic principles and main terms,” a source told TelecomFinance.
Respective owners Russia’s Vimpelcom (NASDAQ:VIP) and Hong Kong-based Hutchison Whampoa have met several times in London over the past month, in an effort to find a compromise on capital structure and governance, reports Reuters.
Although the companies had stated in May that they were in talks over a possible “equal” joint venture, Hutch is seeking a controlling position via a majority of voting rights, according to a source cited by the newswire.
The companies are considering the possibility of a joint rights issue, to resolve Wind’s €8.9bn (US$9.74bn) debt burden, another source was cited saying.
Hutchison, which has played the role of maverick in most of its European markets, has come from behind to buy larger counterparts in Ireland, Austria and Switzerland. Its agreed £10.3bn (US$15.3bn) takeover of Telefonica’s O2 in the UK is under regulatory review.
The Li Ka-Shing-owned company is already involved in one 50:50 joint venture, number three player Vodafone Hutchison Australia (VHA), the result of a merger agreed in 2009.
On the Italian deal, Hutchison is advised by Goldman Sachs, while Vimpelcom is working with Morgan Stanley and HSBC. The companies have previously discussed combinations ranging from a tower JV to a full merger.
A spokesperson for Vimpelcom declined comment, while spokespeople for Hutch and 3 Italia were not immediately available for comment.
