The Canada Pension Plan Investment Board (CPPIB) and the Caisse de dépôt et placement du Québec, together with other institutional investors, are buying a combined 33% stake in the British mobile phone company of Hong Kong billionaire Li Ka-shing, Three U.K.
The CPPIB is also investing £1.1 billion for a 12% stake in the entity that will be created after the merger of Three U.K. and Britain’s second-largest mobile operator, O2 U.K. The Caisse hasn’t disclosed its stake in the new company.
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All investors will put in a total of £3.1 billion in the newly merged entity, which will be the number one mobile operator in the U.K. with nearly 33 million customers.
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“This is an exceptional opportunity to acquire a meaningful stake in what will become a leading mobile operator in the U.K., giving us immediate scale in an important sector,” says Mark Jenkins, senior managing director and global head of private investments at the CPPIB. “We expect this investment will generate attractive long-term risk-adjusted returns, which is appealing for an investor like CPPIB.”