Vodafone's CEO said a long-awaited 15 billion pound ($19 billion) plan to merge its British business with CK Hutchison's (0001.HK) Three UK mobile network is "progressing" but is not there yet, dampening hopes of a deal being imminent.
The companies have been in talks since at least October to combine Britain's third and fourth-largest networks, and sources had suggested that a deal was close after Hutchison's leadership team met British government officials in March.
Vodafone and Hutchison say they need to join forces to afford to roll out the 5G networks the British government wants, but getting a deal done has proved tougher than expected.
"It will take as long as it takes to get a good deal," Vodafone CEO Margherita Della Valle told reporters on Tuesday, adding that the tie-up still had a "strong rationale" and would be good for customers.
Hutchinson was similarly cautious last week, apparently rowing back from comments in March when co-managing director Canning Fok said talks were in their final stages.
"I would say they (Vodafone) are extremely difficult to draw a conclusion with on the one hand, but on the other hand they are, in the end, very good partners," Hutchinson's Chief Financial Officer Frank John Sixt said last week.
Vodafone is under pressure to wrap up the deal as it looks to revive growth. It announced plans to cut 11,000 jobs on Tuesday and forecast a 1.5 billion euro drop in free cash flow.
The British group has said consolidation is needed in major markets like Britain and Italy, while in Spain it could look to exit, depending on the results of a strategic review.
Vodafone said there could be no certainty that any transaction would ultimately be agreed with Hutchison.
The tie-up is expected to face intense antitrust scrutiny at a time when Britain's regulator has shown a willingness to block deals. It caused a stir last month when it blocked Microsoft's Activision acquisition.
($1 = 0.7923 pounds)
