Hutchison Whampoa perturbs British telecom market

Coup from Hutchison

Hutchison is willing to pay 9.25 billion pounds (some 11.8 billion euro) to acquire O2 in a first phase, with an additional 1 billion pounds (1.3 billion euro) possibly afterwards. Telefonica bought O2 in 2006, but would be able to lower its debt by selling it again.

The Asian concern wants to merge O2 with its own British subsidiary, Three, to create the largest British mobile phone operator. The merger, which would have 31 million customers (22 million from O2), should be finalized by mid-2016.

Three is known for its low prices, but people fear that the merger may cause a price hike because of the overwhelming market position the new company may have. The deal has not been finalized yet, despite the fact that both groups have been talking for a while. The antitrust authority also has to approve the final deal.

BT also on the move

Hutchison Whampoa O2’s deal is not the only thing rumbling in the British market: BT is considering a move for EE, the current market leader in mobile telecommunications, and is willing to pay 12.5 billion pounds (16.7 billion euro) to acquire the company from Deutsche Telekom and Orange.

Hutchison is not only planning a move on the British market, as it is only contemplating a move in the Italian market. The company, run by Li Ka-shing, owns retail brands like A.S. Watson, Kruidvat, ICI Paris XL and The Perfume Shop.