You are here

CK to buy full control of Italy venture for US$2.9b

CK Hutchison Holdings Ltd. agreed to buy out its partner Veon Ltd. to take full control of their Italian mobile-phone joint venture for 2.45 billion euros (S$3.98 billion), expanding the Hong Kong conglomerate's push into European telecommunications.

Veon, the wireless carrier formerly known as VimpelCom, will sell its 50 per cent stake in closely held Wind Tre SpA to CK, the companies said in statements on Tuesday. Veon said it expects the deal, which is subject to European Union and Italian regulatory approvals, to be completed in the third quarter or early in the fourth quarter.

The purchase marks the third billion-dollar-plus deal that Chairman Victor Li has announced since taking over from his famed father as head of Hong Kong's biggest conglomerate in May. Last month, CK companies agreed to offer A$13 billion (S$13.03 billion) to buy Australian gas-pipeline operator APA Group and purchased UBS Group AG's headquarters in the City of London financial district for 1 billion pounds (S$1.78 billion).

CK Hutchison shares fell 2.2 per cent as of 1 p.m. in Hong Kong amid a broader rout in Asian stocks. The stock was little changed from where it was during the midday trading break, when the deal was announced.

sentifi.com

Market voices on:

CK Hutchison and Veon combined their Italian telecom businesses to form a venture in 2016 under the brands "3" and "Wind."

Veon, which expects to book net gains of about US$1.1. billion from the sale, said it will use proceeds to buy Global Telecom Holding S.A.E's assets in Pakistan and Bangladesh, as well as paring down debt. Veon is offering to buy GTH's operations such as Pakistan's Jazz and Bangladesh's Banglalink for US$2.55 billion in cash, deferred considerations and assumed debt.

BLOOMBERG