Reports suggest Vodafone is closing in on UK merger with Three UK

Telco giant Vodafone is just weeks away from formalising a merger between its UK business and rival network Three, according to reports in the media.

The two parties have been in discussion for around six months, with Three UK CEO Robert Finnegan recently saying that the CK Hutchison-owned business is “unsustainable” without the merger. Vodafone’s shares rose slightly in response to the news.

Vodafone, which lost its CEO at the end of last year, has been looking at merger options in its core markets for some time – as it seeks to reduce its high debt pile. The merger with Three has long been touted as the most likely deal to happen first.

The news follows last week’s report that Vodafone has also received offers in the region of $4bn for Vodafone Spain. According to Bloomberg, the company has been approached by a number of suitors including private equity firms.

Vodafone is not actively pursuing a sale of its Spanish operation but is open to disposal at the right price. The company had hoped to seal a merger with rival Spanish player Masmovil – but was beaten to the punch by Orange (subject to approval). Earlier this year, Vodafone Spain CEO Colman Deegan left the company. He was replaced at the start of this month by Mário Vaz, previously CEO of Vodafone’s Portuguese operation.