Wednesday, March 3, 2021

Hutchison Whampoa sells one-third stake in UK unit

Hutchison Whampoa is selling a third of its holding in British mobile phone business for £3.1bn, funding its biggest deal in Europe to date.

Hutchison announced earlier this year that it was to buy Telefonica‘s O2 for the sum of £10.3bn, and combine it with its UK subsidiary Three to create the top mobile operator in Britain.

The company, owned by Hong Kong billionaire Li Ka-shing, has said that five institutional investors are to acquire stakes totalling 33% in the merger.

The fresh investments are conditional and will occur upon completion of the acquisition, the company said in a statement. The acquisition and merger is subject to approvals from the EU competition regulator, among other approvals.

“It is an honour to have such a strong collection of the world’s largest and most sophisticated investors joining us as partners in building the combined business of Three and O2 UK, which will be the number 1 mobile operator in the UK with nearly 33m customers,” said Canning Fok, Group Managing Director of Hutchinson.

“The investors share our vision and belief in the value of creating a business with the necessary scale to enable us to compete effectively in the UK marketplace and to provide even better service and innovation using the largest and most resilient and advanced mobile network infrastructure in the country.”

He added the funding reflects investors’ “continued confidence in the UK economy” as well as “a vote of confidence in Europe’s plans for a single market in digital communications, leading to increased investment in the telecoms sector”.

The deal value could grow by nearly £323m if the O2 mobile phone business meets performance targets.


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