Hutchinson Whampoa will sell a 33 percent stake in merged Three and O2 network

Hutchison Whampoa, the parent of company of the Three UK network, has announced plans to fund its buyout of O2 UK by selling a third of the combined Three and O2 network. The merger of the two carriers will create the UK's largest mobile operator with a combined 33 million customers.

The Hong Kong-based company announced its plans to buy O2 UK for £10.25 billion and will fund this move with a £6 billion loan from banks plus £3.1 billion from five investors. The five investors - who will own an aggregate 33 percent of the combined business - are:

  • Canada Pension Plan Investment Board
  • GIC (Singapore)
  • Limpart Holdings Limited (subsidiary of Abu Dhabi Investment Authoirty - ADIA)
  • CPDQ (Quebec, Canada)
  • BTG Pactual (Brazil)

Canning Fok, Group Managing Director of Hutchison Whampoa, said:

“It is an honour to have such a strong collection of the world’s largest and most sophisticated investors joining us as partners.

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.”

The buyout of O2 UK still has to gain regulatory approval but with other similar deals approved in Europe over the past few years, it seems likely that the buyout will go through. This deal - and BT's buyout of EE - will result in just three major players in the UK telecoms market, versus five just a few years ago.

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