Vodafone CEO Margherita Della Valle has announced a 15 billion pound merger of its UK mobile operations with those of CK Hutchison to form a new market leader, marking her first win since taking over in April.
- The two sides first revealed they were in talks in October 2022, and if they can secure regulatory and political approval, they hope to close the deal by the end of 2024, meaning they must wait another 18 months before any synergy savings or improvement in performance can start to hit the bottom line.
- Della Valle has been tasked with overhauling the business in key European markets and halting a slide in performance that has left its share price languishing at 25-year lows.
- The announcement is likely to bring some relief to a management team that has struggled to get a break in recent months, with weak trading in Germany, Spain, and Italy, leading to former boss Nick Read agreeing to step down last year.
- Many investors want Vodafone to replicate similar deals across markets such as Italy and Spain, where fierce competition has eaten into returns at a time when telecom groups are spending heavily to invest in ever faster networks.
- While the merger is seen as a boost for Della Valle’s early tenure, it’s clear that replicating similar deals in other markets will take time, and investors want to see more action soon.