Telefónica’s deal to sell O2 to Hutchison Whampoa for £10.25 billion is finalised

It appears that the choice of mobile network providers in the UK will shrink yet again after confirmation that the owner of Three, the Hong kong based Hutchison Whampoa, has agreed terms to buy O2 from Spain’s Telefónica for £10.25 billion. This confirmation comes after the company performed 2 months of due diligence since the initial announcement on January 23rd.

The result of Hutchison Whampoa’s purchasing O2 will mean that the group will control more than 40 percent of the UK market with its 31 million subscribers, overtaking EE as the largest network provider. It’s believed that the O2 brand will continue to be run alongside Three, possibly as a premium brand while Three would carry on catering to consumers looking for value-for-money deals. There is the chance though that the O2 brand name might be discontinued as it was when Three merged with O2 in Ireland.

Hutchison Whampoa will make an initial payment of £9.25 billion with remaining £1bn to be paid once the company’s cash flow has reached certain benchmarks. The transaction basically means that there will only be 3 major network providers in the UK; O2/Three, EE (recently acquired by BT) and poor old Vodafone that has understandable complaints about the deal and how it affects both it and the British consumer. With this in mind, the deal still has to be ratified by the UK’s regulatory authorities although it’s thought that there are no major roadblocks to the transaction and it should be finalized in 2016.

What do you think of O2 being purchased by Hutchison Whampoa? Will you be looking for a new mobile service provider or will you wait and see what happens?

Source: Telefónica

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