(By Sarah Young, Acquisitions Monthly)

The proposed £7bn merger of Orange and T-Mobile in the UK may be too much for Vodafone to bear, pushing it into a tie-up with Hutchison Whampoa’s mobile businesses 3, not just in the UK but also in Italy.

Indeed, earlier this year, Vodafone merged its operations with those of 3 in Australia.

If Orange and T-Mobile ink a deal by October, as they say they will, and the competition watchdogs approves it, 3 will find itself as the UK’s fourth largest mobile operator with just 8% of the market. Vodafone will be pushed back into third place – something one of the world’s largest mobile phone operators could find difficult to stomach in its home market.

Its third place position will make it hungrier for 3 than Telefonica’s O2, which currently holds the top mobile spot in the UK. Sources said that Vodafone was more committed than O2 to buying T-Mobile UK.

Hutchison is also considering a possible merger of its 3 Italia operation, but has ruled out a deal with Italian number three player Wind. Perhaps Vodafone, the number two player in Italy, could also look to do a deal with 3 in that country’s market.