Exclusive-Vodafone and Hutchison to announce UK merger on Friday

HONG KONG/LONDON (Reuters) – Vodafone and CK Hutchison are set to strike a deal to merge their UK businesses, with a long-awaited announcement expected as early as Friday or early next week, three sources told Reuters.

The structure of the agreed deal is in line with Vodafone’s announcement in October, with the UK group owning 51% and Hutchison owning 49%, achieved by adjusting debt ownership rather than swapping cash, said one of the sources.

Including debt, the deal could be valued at around 15 billion pounds ($18.6 billion), analysts said.

Hutchison declined to comment. Vodafone was not immediately available for comment.

The merger will create Britain’s largest mobile operator with around 27 million customers, overtaking BT’s EE and VM O2, owned by Telefonica and Liberty Global.

The deal will come under scrutiny from regulators who have previously opposed deals that cut the number of networks in major markets from four to three.

($1 = 0.8061 pounds)

(Reporting by Clare Jim in Hong Kong and Paul Sandle in London; Editing by Kate Holton)

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