(MENAFN- The Peninsula) Hong Kong tycoon Li Ka-Shing's Hutchison Whampoa said yesterday it is in "exclusive negotiations" to buy mobile phone giant O2 for up to $15.4bn, in a deal that would create Britain's biggest mobile phone group.
Hutchison confirmed in a statement that it was in talks to buy the company from Spain's Telefonica for £9.25bn, with a deferred further payment of up to £1bn after completion of the deal.
It said the deal was subject to due diligence and regulatory approvals, adding: "The negotiations may or may not result in any transaction."
Shares in Hutchison, which had been suspended for a short time yesterday morning as reports swirled over the sale, ended up 2.95 percent by the close.
Hutchison already owns Britain's Three mobile phone network and the purchase of O2 would create the country's largest mobile company.
The move comes after Hong Kong investment icon Li - a former plastic-flower seller who is now Asia's richest man - announced this month a $24bn revamp of his vast business empire, and is the latest in a string of purchases.
"Li Ka-shing likes to buy European assets - one of the reasons is they are relatively cheap," said Kevin Tam, financial analyst at Hong Kong-based Core Pacific-Yamaichi.
The potential acquisition of O2 is part of Li's quest for international diversification and steady growth, Tam said.
"Buying a telecoms company can generate a stable growing cashflow... The capital expenditure requirement is not very demanding and there isn't much fluctuation. Stability is the key," he said.
Hutchison finance director Frank Sixt said the deal would probably face anti-trust scrutiny from the European Commission and would not be closed until mid-2016, according to Bloomberg News.
"I like to think that we can move very quickly in any circumstance, but you have to achieve the right deal for all sides," Sixt said.
He added that the deal would mean Hutchison owns the largest mobile operator in Britain by market share.
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