Three owner agrees terms to buy O2
It has been revealed that the owner of Three has agreed to purchase O2 in a deal worth £10.25bn.
The two companies started negotiations in January and now Hutchison Whampoa has agreed the terms of the deal to take O2 off the hands of Telefonica. This will see the creation of the largest UK mobile network, with around 34 million customers.
Hutchison has agreed to pay Telefonica £9.25bn upfront, with a further £1bn to be paid when the combined cash flow of the two companies has reached a certain amount; however, this amount has not been disclosed.
Canning Fok, Hutchison’s group MD, has described the deal as a “major milestone”. He believes that the two companies joining forces will offer better service to customers in the UK and will not make the market any less competitive.
O2 is currently the second-largest mobile provider in the UK, while Three sits in fourth place; EE is the largest and Vodafone sits in third place. Before the deal can be completed it will need to be approved by the European Commission antitrust authority and the Competition and Markets Authority in the UK. Three has already seen similar deals approved in Ireland, Austria and Germany.
This is the second such deal in the UK in as many months, as BT has already announced that a deal has been agreed for the purchase of EE for £12.5bn.