As expected, O2 is now under new ownership. The people behind Three, Hutchison Whampoa, have now signed the deal to acquire Telefónica’s UK operation – O2 UK. Due diligence is complete and the final purchase price is £10.25 billion (€14 billion). This will be made up of £9.25 billion in cash with another £1 billion “once the cumulative cash flow of the combined company in the UK has reached an agreed threshold”.
What will happen next? We can only assume that the O2 as a brand will vanish and Three will soak up the infrastructure and customers. What will happen to the Telefónica-owned giffgaff, which runs on the O2 network, or other O2 MVNO’s like Tesco Mobile? What about the O2 stores? We’re not entirely sure, but the agreement states that..
After the execution of the definitive agreement, O2 UK will be reported as a discontinued operation within Telefónica Group.
Your thoughts? Are you an O2 customer or do you use an MVNO running on their network? Are you looking forward to the change? Do let us know.
Update – This Hutchison Whampoa press release hints that the two networks will likely merge under the Three brand.
£9.25bn deal will create the number 1 mobile operator in the UK
The acquisition of O2 UK will create the number 1 mobile operator in the UK with almost 33 million customers and the deal is expected to generate significant synergy potential. This combination will provide our business with the scale and financial strength necessary to be an even more effective and aggressive competitor in the rapidly evolving UK telecommunications sector. The combined business will have a much stronger ability to compete and businesses and consumers alike will benefit from the combined networks which will deliver better network coverage and quality of service.
The completion of this transaction is subject to EU competition approval. More details below