Telefónica confirmed this morning it has entered into an “exclusivity agreement” with Hutchison Whampoa that could see it offload subsidiary O2 for up to £10.25bn in cash.
Talks between the pair surfaced last weekend and if signed and sealed will further consolidate the mobe carrier space, coming weeks after BT turned its back on an O2 buy and opted to splash £12.5bn on EE instead.
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That cleared the lanes for Hong Kong-based Hutchison Whampoa, which already controls UK mobe carrier Three, and today Telefónica went public, claiming the agreement includes £9.25bn on completion, with another £1bn deferred, presumably based on certain criteria being met.
“The exclusivity period will last several weeks, allowing Telefónica’s transformation process, initiated by the company to become the leading digital telco and accelerate sustainable long-term growth while maintaining an attractive remuneration policy,” the Spanish parent of O2 said.
EU competition regulators will cast a keen eye on the deal, and last year initially put the brakes on Hutchison Whampoa’s acquisition of O2 Ireland, but following some concessions made by the Honkers biz, it was agreed.
Last April, Hutch poo-pooed industry chatter it was going to make a bid for O2 in Blighty, with UK boss Dave Dyson saying: “We don’t need to consolidate with anybody.”
Obviously his boss, mobe mogul Li Ka-shing, disagreed. ®