By Najat Kantouar

Vodafone Group's deal to merge its U.K. business with rival operator Three has been conditionally approved by the country's antitrust authority, putting an end to an eighteen-month investigation into it.

The Competition and Markets Authority said on Thursday that the deal will likely boost competition in the U.K. mobile sector, but would only proceed if both companies implement certain conditions.

The merger will be allowed to proceed if U.K. telecoms group Vodafone and CK Hutchison Holdings' Three commit to deliver a joint upgrade network plan across the U.K. over eight years and keep certain mobile tariffs and data plans for at least three years to ensure retail customers can secure good deals while the network integrates and investments are rolled out, it said.

Both companies have pledged to invest 11 billion pounds ($13.97 billion) to create an advanced next-generation 5G network. The new network is expected to reach a wide range of the population and benefit over 50 million customers, Vodafone said. The investment will require no public funding and will boost competition between the mobile network operators in the long term, it added.

The merger is expected to complete during the first half of 2025. Vodafone would own 51% of the merged entity after three years following completion and subject to certain conditions, and the remaining 49% would be owned by the Hong Kong-based conglomerate. Vodafone said that it might acquire Hutchison's 49% stake via a put and call option later.

In early morning trading, Vodafone Group shares were up 0.46 pence, or 0.7%, at 70.26 pence. Year-to-date, share have risen 2.4%.

Write to Najat Kantouar at najat.kantouar@wsj.com

(END) Dow Jones Newswires

December 05, 2024 03:34 ET (08:34 GMT)

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