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CK Hutchison statement in response to
media enquiries regarding UK telecom business

(Hong Kong, 3 October 2022) CK Hutchison Holdings Limited (“CKHH”) notes the recent press speculation in relation to Three UK and Vodafone UK.

CKHH confirms that it is in discussions with Vodafone Group Plc (“Vodafone”) in relation to a possible combination of Three UK and Vodafone UK.

The envisaged transaction would involve both companies combining their UK businesses, with CKHH owning 49% and our partner Vodafone 51% of the combined business.

The relative ownership would be achieved through a differential leverage contribution at closing, and no cash consideration will be paid.

The UK Government rightly sees 5G as transformational for the economy and society and critical to the UK becoming more competitive in an increasingly digital world.

The conditions to ensure thriving competition in the market need to be nurtured, otherwise the UK is at risk of losing the opportunity to be a 5G leader. As Ofcom has identified, some operators in the UK - Three UK and Vodafone UK - lack the necessary scale to earn their cost of capital(1).

By combining our businesses, Three UK and Vodafone UK will gain the necessary scale to be able to accelerate the rollout of full 5G in the UK and expand broadband connectivity to rural communities and small businesses.

The merged business would challenge the two already consolidated players for all UK customers and bring benefits through competitively priced access to a third reliable, high quality, and secure 5G network throughout the UK.

There can be no certainty that any transaction between the two companies will ultimately be agreed.

If required, a further announcement will be made when appropriate.

(1) Ofcom’s Discussion Paper (February 2022) described Vodafone UK and Three UK as sub-scale operators