Telefónica sells O2 Ireland to Hutchison’s 3

Telefónica sells O2 Ireland to Hutchison’s 3

Telefónica has agreed the sale of O2 Ireland to Hutchison Whampoa’s subsidiary, 3 Ireland, for a reported $1 billion (€780 million).

The deal is still subject to regulatory approval, and includes an additional deferred payment of €70 million if certain financial goals are achieved.

Telefónica was deliberating the sale earlier this month, and, if approved, it is expected to cut the company’s debt from €52 billion to €47 billion by the end of the year.

Barclays and Bank of America Merrill Lynch advised Telefónica on the deal, and analysts at Espírito Santo told reporters that the sale of O2 Ireland was the right move for the Spanish operator.

“This should enable Telefónica to reduce its leverage by approximately 1% at the end of 2013,” they said.

Hutchison is openly looking for more investment in Europe, and the acquisition of O2 Ireland follows reports earlier this year that Hutchison was targeting Telecom Italia’s mobile arm.

The combined companies would rocket 3 Ireland’s market share to 37.5%, and, in 2012, the two companies had collective revenues of €803 million, according to Reuters.