FX.co ★ VimpelCom and Hutchison to merge their Italian mobile units

Asset pooling of the Italian branches of Vimpelcom and Hutchison was approved by the Eurocomission on September 1st, 2016 after thourough consideration. The regulator claimed that merger of companies raised some concerns as it could lead to limited competition on the Italian market. The new company will likely become the largest one among the existing mobile carriers.

The restructuring proposed by Hutchison and Vimpelcom should ease the restriction of the competition and avoid the negative impact of mergers on other communication providers. Vimpelcom and Hutchison will help the French Iliad enter the Italian market, giving it some of its assets. As a result, both companies and subscribers of the Italian mobile operators will benefit. With such a perspective, effective competition is evident, the European Commission believes.

Iliad informed that in a month before last the company entered into an agreement with Vimpelcom Ltd. and Hutchison and acquired the part of its assets. The amount of the transaction is estimated at 450 million euros, the payment will be divided into several tranches (2017 – 2019). Also Hutchison and Vimpelcom will transfer Iliad several thousand towers located in a densely populated area.

The European Commission emphasizes that the transfer of the part of Iliad's assets is a mandatory deal's condition between Vimpelcom and Hutchison. This step was also approved by the regulator. The new merged company will become the Italy's largest cellular operator. According to the preliminary estimates, its revenue can reach one-third of all revenues in this market. This is slightly more than the revenue of Telecom Italia, the current leader.