Three Owner Hutchison Whampoa ‘In Talks’ To Buy O2

Hutchison Whampoa, parent company of mobile operator Three, is reportedly in ‘early talks’ with Telefonica over a possible £9 billion takeover of rival O2, according to The Sunday Times.

Telefonica bought O2 from BT for £17.7bn in 2005 and is keen to exit the increasingly competitive UK market as the Spanish-based operator has no interest in getting caught up in the trend towards convergence.

O2 Three takeover

Vodafone, Sky, Virgin Media, TalkTalk and BT all, or have plans to, offer various ‘triple-play’ and ‘quad-play’ packages of landline, mobile, broadband and television services, while O2 only has a mobile network after selling its fixed line business to Sky in 2013.

BT had been considering a purchase of O2, but has instead turned its attention to EE, which it could buy for £12.5 billion.

Hutchison has reportedly hired UBS to handle any transaction, which would provide Telefonica with an exit strategy and provide funds for it to reduce some of its debt. The company is also apparently considering the possibility of offering some shares to the public if it cannot find a buyer.

O2 is the UK’s second biggest mobile operator and when combined with Three’s customer base, could result in the creation of the country’s largest network.

Both Telefonica and Hutchison declined to comment to TechWeekEurope on the speculation, but the two firms have recent history of doing business. Hutchison already owns O2 in Ireland after agreeing a €780 million takeover last June, and is currently merging the business with its existing Three Ireland network.

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