Telefonica agrees £10.25 billion sale of O2 to Hutchison Whampoa
This acqusition is to create a giant that will control 40 percent of the market. Telefonica, the Spanish parent of O2, said it had agreed final terms with Hong Kong conglomerate after two months of exclusive negotiations and due diligence.
The merger of Three and O2 will create Britain's largest mobile operator, with 31 million customers, leap-frogging EE. Hutchison will pay £9.25bn initially, followed by an extra £1bn if the operation meets a cash flow target.
Contraty to BT and Vodafone, which plan to sell bundles of broadband, mobile and pay-TV services, the combination of O2 and Three will be a mobile-only operator.
Ronan Dunne, chief executive of O2, said the merger "will result in the creation of the most customer-centric mobile operator in the UK." It will reduce the choice of mobile operators and will be closely looked at by competition watchdogs. ■