Vodafone has agreed a deal with the owners of Melita to merge their operations in Malta.

The mobile operator’s Maltese subsidiary will join forces with cable, broadband and pay TV provider Melita, which is owned by private equity house Apax Partners MidMarket and investment company Fortino Capital.

The deal values Vodafone Malta at €208 million and Melita at €298 million.

On completion of the deal, slated for the second half of 2017, Melita will own 51 percent of the new business and Vodafone 49 percent.

Vodafone will receive an estimated cash payment of €120 million, while Melita’s shareholders will receive an estimated cash payment of €33 million.

The combined business, which will trade under the Vodafone brand, brings together two networks that both trumpet 99 percent population coverage.

Vodafone said the combined business would be in a stronger position to compete with the fully integrated incumbent GO.

It will offer quad-play services to consumers and “a full range” of enterprise services for businesses and the public sector.

Melita CEO Harald Rösch will head up the new business with the current CFO of Vodafone Malta, Caroline Farrugia, set to take up the same position in the combined entity.

Vodafone said it would announce a new role for Amanda Nelson, the current CEO of Vodafone Malta, in due course.

For the financial year ended March 31, 2016, Vodafone Malta generated a profit before tax of €11 million and had gross assets of €77 million.  

For the 12 months ended December 31, 2016, Melita generated €33 million of underlying EBITDA and €20 million of underlying operating free cash flow.

Read more: Vodafone shrugs off India hit, 2017 loss to predict strong year ahead

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