Hutchison Plans on Acquiring U.K. based O2

Published By : 19 Jan 2015 | Published By : QYRESEARCH

O2, Telefonica SA’s wireless unit in the U.K. will most probably be purchased by Hutchison Whampoa Ltd., since the latter is looking for business expansion in Europe. the other options being considered by Hutchison involves the merging of its Italian mobile unit with its local counterpart and competitor. The investment plans with regard to the U.K. is at the very initial stages and no deal has yet been signed by the parties involved. 

It is expected that Hutchison which is the owner of the Three mobile network will pay a sum of 9 billion pounds for the U.K. based O2. As per talks held last month with regard to the acquisition of EE, the leader in the wireless market by the BT Group Plc, the U.K. was being targeted as the next best place for business investments. These, as a result, made the smaller carriers come up with ways to compete in the market. O2 was also in talks to be in business collaboration with BT. Later on, it was left out after EE was chosen by the U.K. phone monopoly. 

Out of all the U.K. mobile operators, Hutchison’s Three has the lowest share in the market. In fact, it needs to build scale. Therefore, as per industry experts, it makes sense for the acquisition of O2 as Telefonica. And the former is a willing seller since it is basically stuck with debts. Li Ka-shing, who is the chairman of Hutchison Whampoa Ltd. is aiming at consolidating his holdings that range from Asian real estate to the businesses of telecommunications all throughout Europe. Presently, he is also engaged in acquiring businesses outside his domestic home market. In 2014, Telefonica’s Irish unit was taken over Hutchison for a value of US$980 million. 
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