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Vodafone Group Plc Annual Report 2025
Merger of Vodafone and Three in the UK On 31 May 2025, the Group and CK Hutchison Group Telecom Holdings Limited (‘CKHGT’), a wholly owned subsidiary of CK Hutchison Holdings Limited (‘Hutchison’), transferred their UK telecommunication businesses, respectively Vodafone Limited (‘Vodafone UK’) and Three UK Limited (‘Three UK’), into VodafoneThree Holdings Limited (‘VTHL’ ). Following completion, VTHL is a subsidiary of the Group, in which the Group owns 51% of the issued share capital and CKHGT indirectly owns 49%, and Vodafone UK and Three UK are wholly owned subsidiaries of VTHL. Consideration paid by the Group to Hutchison was 49% of Vodafone UK’s equity. No cash consideration was paid in connection with the combination or the grant of options (see below). Vodafone UK and Three UK were contributed with differential debt amounts owing to their respective shareholders at closing to achieve the required ownership structure. The Group advanced loans of £6,010 million to VTHL of which £1,684 million was utilised to settle Three UK’s outstanding debt with Hutchison. In addition, Vodafone and Hutchison committed to an additional £800 million of equity funding in proportion to their shareholdings, which VTHL can draw, if required. As part of the transaction, Vodafone and Hutchison agreed a framework to enable Vodafone to acquire Hutchison’s 49% shareholding in V THL through a Vodafone call or a Hutchison put option which may be exercised at fair market value, subject to customary third party approvals and consents, and settled in cash or new Vodafone Group Plc shares, at the Group’s option, subject to certain conditi ons. The call and put options will become exercisable after three full financial years following closing providing that the fair market enterprise value of VTHL reaches a minimum of £16.5 billion until after the seventh financial year following completion, when this threshold will cease to apply to the exercise of the Hutchison put option. As the Group has the ability to settle the put option with Vodafone Group Plc shares, no put option liability will initially be recorded. While VTHL is a controlled subsidiary of the Group, under certain very limited circumstances, including significant financial underperformance of VTHL, Hutchison may acquire additional rights that might result in a loss of control for accounting purposes. Access to information required to assess the fair value to be assigned to individual assets acquired and liabilities assumed at the date of acquisition was limited in the period prior to the date of approval of the consolidated financial statements. Consequently, the fair value of the net assets acquired from Three UK and any resultant goodwill to be recognised as a result of the combination have not yet been determined.
27. Acquisitions and disposals (continued) Vodafone Italy
On 31 December 2024, the Group announced it had completed the sale of Vodafone Italia S.p.A. (‘Vodafone Italy’) to Swisscom AG for € 7,885 million in cash (subject to closing accounts adjustments). €178 million of the cash received relates to future services to be provided by the Group to Swisscom AG and has been deferred on the Group’s statement of financial position. The table below summarises the net assets disposed and the resulting loss on disposal of € 1,133 million.
€m
Goodwill
(2,398) (3,479) (5,230)
Other intangible assets
Property, plant and equipment
Inventory
(122)
Trade and other receivables Cash and cash equivalents Current and deferred taxation
(1,275)
(64)
(144)
Borrowings
2,089 1,733
Trade and other payables Post employment benefits
35
Provisions
181
Net assets disposed Cash proceeds 1
(8,674) 7,707
Other effects
(166)
Net loss on disposal 2
(1,133)
Notes: 1. Excludes € 178 million of consideration related to future services to be provided by the Group to Swisscom AG. 2. Included in ‘Loss for the financial year - Discontinued operations’ in the consolidated income statement. M-Pesa Holdings In the comparative period, on 28 September 2023, the Group sold M- Pesa Holding Company Limited (‘MPHCL’) which holds funds on trust for M- Pesa customers, to Safaricom Plc for US$1. Balances included in the Group’s consolidated statement of financial positi on at the date of disposal included cash of €63 million, together with short- term investments of €1,195 million and €1,156 million due to M -Pesa customers recorded within Other investments and Trade and other payables, respectively.
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