Hutchison Whampoa has brokered deals worth £3.1 billion to sell a third of the U.K. mobile business created by the merger of its 3UK business and Telefonica’s O2.
Five institutional investors will between them acquire 33% of the merged entity, the Hong Kong conglomerate announced on Friday.
"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 U.K. marketplace," Hutchison Whampoa managing director Canning Fok said.
He noted that the combined 3UK/O2 business will be the largest mobile operator in the U.K. with close to 33 million customers.
Hutchison Whampoa finalised a £10.25 billion deal to acquire O2 from Telefonica in March.
It will fund the transaction using the newly agreed investment and a committed bank facility of £6 billion.
The deal, which reduces the number of mobile network operators in the U.K. to three from four requires various regulatory approvals. Similar deals in mainland Europe have passed the test, and the 3UK/O2 tie-up almost certainly will too.
However, the process could take some time, particularly given the involvement of the European Commission’s antitrust arm, which has imposed remedies designed to protect competition on other telco M&A agreements over the past couple of years.
Hutchison’s agreement with the institutional investors is conditional on completion of the merger; the investment will occur concurrently with the deal closing, Hutch said.
The investors in question are Canada Pension Plan Investment Board, GIC of Singapore, the Abu Dhabi Investment Authority’s Limpart Holdings Limited, Quebec pension fund CDPQ, and Brazilian bank BTG Pactual.
