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Hutchison Whampoa O2 Investment

Hutchison Whampoa sells a third of UK business to fund O2 takeover

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By John McCarthy, Opinion editor

May 8, 2015 | 2 min read

Hutchison Whampoa (HWL) has generated £3.1bn in funding to aid its purchase of UK mobile carrier O2.

Hong Kong-based tycoon Li Ka-Shing’s HWL generated the £3.1bn in capital through savings and pension funds to aid in its £10.25bn acquisition of O2 from Telefonica.

Furthermore, to bankrole the deal HWL announced it has sold a third of the O2 and Three business to an investment conglomerate led by the Canada Pension Plan Investment Board (CPPIB).

The combined mobile company will become the largest in the UK boasting 33 million customers and an extensive 4G network to rival that of EE which is similarly being acquired by UK telecom giant BT for £12.5bn (subject to competition watchdog approval).

Mark Jenkins, senior managing director and global head of private investments at CPPIB, said: “This is an exceptional opportunity to acquire a meaningful stake in what will become a leading mobile operator in the UK, giving us immediate scale in an important sector.

“We expect this investment will generate attractive long-term risk-adjusted returns, which is appealing for an investor like CPPIB.”

The merger between HWL and O2 is subject to approval from EU competition watchdogs

As the battle lines are drawn between the UK’s biggest mobile carriers, mobile marketing platform Weve will see Vodafone and EE withdraw from a joint venture, leaving it in the hands of O2.

Hutchison Whampoa O2 Investment

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