Vodafone and Three to merge​

By Jake Rickman

What do you need to know this week?

Yesterday, UK telecoms giants Vodafone and Three announced their agreement to merge. If the deal goes ahead, it will create the largest cellular operator in the UK. The deal is valued at £15bn.

However, while much of the particulars will have been negotiated between Three and Vodafone before the public announcement, the transaction is still early-days. In particular, the deal with almost certainly attract regulatory scrutiny from the UK’s competition authority, the CMA. (As we saw with the Microsoft-Activision merger, the CMA is clearly not afraid to intervene if it concludes the deal violates competition laws…)

Why is this important for your interviews?

These sorts of blockbuster mergers are comparatively fewer and farther in our current economic climate, which makes the news all the more interesting if you’re interested in classic corporate law.

For interview purposes, you may find it helpful to have a current or recently announced deal in the back of your mind to discuss. In particular, there are three aspects generally worth familiarising yourself with for any M&A transaction:
  1. The structure of the deal;
  2. The business case behind the deal; and
  3. The specific legal issues the deal may create.
Mergers between one or more publicly-traded company almost always allow you to research the particulars of the proposed transaction yourself, due to the disclosure obligations on public companies.

To illustrate, Vodafone has published a press release that outlines the business case behind the merger, as well as an investors’ presentation detailing how the deal will be structured. If you are interested in corporate finance and M&A, it is definitely worth checking out these publications.

With reference to these two publications, a summary of the deal aspects (1)-(3) above might look like:

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How is this topic relevant to law firms?

As disclosed in Vodafone’s investor circular, Slaughter and May is advising Vodafone. The Lawyer reports that Linklaters is advising Three UK and its holding group, CK Hutchison Holdings.

No doubt the lucky lawyers involved are keen to work on an M&A transaction of this size given the relative scarcity of such deals as of late.