Hong Kong’s Hutchison Whampoa confirmed it is in exclusive talks with Telefonica to buy its UK subsidiary O2 in an acquisition potentially worth more than GBP 10bn. The deal would include an upfront payment of GBP 9.25bn in cash plus an additional GBP 1bn to be paid “once the cumulative cash flow of the combined company in the UK has reached an agreed threshold,” the Spanish telecoms giant said in a statement. Negotiations are set to last for several weeks. Hutchison, helmed by Li Ka-shing, owns Three, which currently the fourth biggest mobile operator in the UK. However, once the O2 deal is finalized, Hutchison would surpass the current market leader EE’s 28 million users and cut the number of networks from four to three. The merger could raise competition concerns by UK regulators.
