CK Hutch calls off bid for Italian deal

CK Hutchison (0001) has terminated its push to set up a joint venture for wholesale mobile telecom services in Italy.

"Conditions precedent to closing of the transaction were not satisfied," CK Hutchison said in a company filing yesterday.

CK Hutchison operates Wind Tre in Italy, the country's third largest mobile carrier.

The deal had set an enterprise value for the network company of 3.4 billion euros (HK$31.19 billion).

The plan was set up in May, with CK aiming to partner up with Swedish private-equity firm EQT to tap into the European country.

Under the plan, Wind Tre was set to transfer its active network equipment, as well as its wholesale mobile and fixed communications services business in Italy, to a new company, in which CK Hutchison Group Telecom would own 40 percent of stake.

Italy is one of the most competitive telecom markets in Europe, in part because of Iliad, which moved into the country in 2018 offering cheaper, no-frills mobile plans that sparked a price war.

Last year, the former mobile monopoly Telecom Italia sold its landline network to the US private equity firm KKR & Co. in a monster deal that valued the grid at up to 22 billion euros.

The failed Italian deal is not the first tough acquisition that CK Hutchison has come up against.

In October, the UK's antitrust watchdog sought market feedback on the long-anticipated merger of Vodafone Group and CK Hutchison's British units before it kicks off a formal investigation on the US$19 billion (HK$148.2 billion) tie-up.

The Competition and Markets Authority said last week it would provide an opportunity for rival firms and interested parties to comment on what impact the combination could have on competition in the UK.

"We will also assess how it may affect incentives to invest in the quality of UK mobile networks," said chief executive Sarah Cardell of the deal to buy Three, creating the UK's largest mobile operator by revenue and facing a challenge in getting the watchdog to sign off on it.