CK Hutchison Holdings, VimpelCom To Form 50:50 JV For Italian Telecom Business

(RTTNews) - CK Hutchison Holdings Ltd., parent company of Italian mobile operator 3 Italia, and VimpelCom Ltd. (VIP), parent company of WIND Thursday said they have entered into an agreement to form a 50/50 joint venture. The new entity would own and operate their telecommunications businesses in Italy. The combined business will be led by Maximo Ibarra, the current CEO of Wind.

The combination of 3 Italia and WIND is expected to offer innovative, competitively-priced telecoms services and to compete more aggressively in the Italian market place. The joint venture would provide improved LTE network quality and the availability of high-speed mobile and fixed broadband services throughout Italy.

The combined business will have more than 31 million mobile customers and 2.8 million fixed line customers and is expected to generate significant Capex and Opex benefits with a net present value, less integration costs, in excess of €5 billion.

Canning Fok, co-group managing director of CK Hutchison, said: "This joint venture will give the combined business the scale and strength to offer Italian consumers and businesses a state of the art network with greater 4G coverage and higher speeds."

The VimpelCom Supervisory Board has approved the deal on a unanimous basis and the deal is expected to be completed within 12 months. The board will have six members and three of whom will be nominated by each parent company respectively. The Chairman will rotate between the two parent companies every 18 months.

Once the deal is complete Vincenzo Novari, the current CEO of 3 Italia will serve as a CK Hutchison nominee on the JV Holdco board. Dina Ravera, 3 Italia's COO, will lead the merger integration process while Stefano Invernizzi, current CFO of 3 Italia, will become CFO of the combined business.