Hutchison buys Telefonica's O2 Irish mobile business for €780m
Hutchison Whampoa, the flagship conglomerate of Li Ka-shing, is poised to become Ireland's leading mobile network operator with its purchase of Spanish group Telefonica's O2 business for €780 million (HK$7.9 billion).
The deal forged by Three Ireland, a Hutchison subsidiary, includes an additional deferred payment of €70 million if certain stipulated financial targets are met.
By acquiring O2 Ireland, Three's market share in the country will reach 37.5 per cent and bring its total subscribers to two million. The transaction is subject to regulatory approval.
Robert Finnegan, the chief executive at Three Ireland, said the deal represents "a major vote of confidence in the Irish market" and positioned the operator as the No1 player in the country.
Three, which entered Ireland in 2005, has invested more than €800 million to build its 3G mobile network in the country, where it is the third-largest player behind Vodafone Ireland and O2 Ireland.
The combined revenue of Three and O2 Ireland reached €803 million last year. Three currently runs 50 retail shops, while O2 Ireland has more than 70 stores in the market.
O2 Ireland runs 2G and 3G mobile networks in Ireland. It recently acquired the rights to spectrum to roll out a high-speed 4G network nationwide.
"Our combined 37.5 per cent market share gives us the scale and financial strength to compete even more aggressively in the market to the benefit of consumers," Finnegan said.
He said that investments to build a 4G network would be made over the next few years. Reports last week said Madrid-based Telefonica was selling O2 Ireland to help trim its debt of €51.2 billion.
Hutchison, meanwhile, has been stepping up its investments in Europe, where the company completed its €1.3 billion purchase of wireless carrier Orange Austria in January this year.
However, the Hong Kong-based conglomerate failed last year in its €2 billion bid to acquire the Irish telecommunications network operator Eircom Group.
Hutchison's Three group owns mobile network operations in Italy, Britain, Denmark, Sweden, Austria, Australia and Ireland.