Following a spate of rumors, the owner of the Three mobile network in the UK, Hutchison Whampoa, has confirmed it’s in discussions to acquire the O2 network, which is owned by Telefonica. The “extensive negotiations” have resulted in a cash price offer of £9.25 billion/$15.4 billion, with a further £1 billion expected to be paid after the newly formed company’s cash flow reaches an agreed point.
Should the deal go through, the resulting network would be the UK’s largest mobile operator, in terms of total number of connections. It would pass competitors Vodafone and EE, the latter of which was formed when T-Mobile and Orange joined forces back in 2010.
The deal hasn’t been completed yet though, and according to an IDC analyst speaking to Mobile World Live, it will almost certainly receive “huge regulatory scrutiny,” primarily because it would reduce the UK mobile market to three options. He also warns mobile customers could see price rises due to the partnership.
According to Hutchison Whampoa’s official announcement, it still has to complete the due diligence stages, meet all the regulatory approvals, and sign the final agreements. The post points out these negotiations “may or may not result in any transaction,” so it’s far from being final yet.
A report published by the Financial Times says the O2 network will make its announcement of the potential sale before the end of the week.
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