Hutchison Whampoa to sell off 33% stake in UK mobile unit
Hutchison Whampoa Limited has revealed through a press release that the company is going to sell off 33 per cent stake in its UK mobile unit and for this purpose, it has entered into agreement with five major institutional investors.
Hutchinson revealed that it has inked agreement that will see it part ways with 33 per cent in the aggregate in the combined businesses of Three and O2 UK for a total consideration of £3.1 billion. It has signed the agreement with Canada Pension Plan Investment Board, GIC of Singapore, Limpart Holdings Limited, a wholly owned subsidiary of the Abu Dhabi Investment Authority (“ADIA”), CDPQ of Quebec, Canada and BTG Pactual of Brazil.
Their investments are conditional on and will occur concurrently with completion by Three of the acquisition of O2 UK from Telefónica and its combination with Three’s businesses, which is in turn subject to EU Competition approvals. The full proceeds of their investments will be used, together with a committed bank facility of £6 billion, to fund the acquisition of O2 UK from Telefónica which was announced on 25 March 2015.
Commenting on the agreement Canning Fok, Group Managing Director of HWL said, “It is an honour to have such a strong collection of the world’s largest and most sophisticated investors joining us as partners in building the combined business of Three and O2 UK, which will be the number 1 mobile operator in the UK with nearly 33 million customers.
“The investors share our vision and belief in the value of creating a business with the necessary scale to enable us to compete effectively in the UK marketplace and to provide even better service and innovation using the largest and most resilient and advanced mobile network infrastructure in the country. Like us, the willingness of these investors to commit substantial capital to this investment reflects continued confidence in the UK economy and its commitment to maintain and foster a dynamic and world leading telecommunications sector, as well as a vote of confidence in Europe’s plans for a single market in digital communications, leading to increased investment in the telecoms sector.”