Spanish telecoms giant Telefónica has just sold the Irish unit of its O2 brand to Hutchinson Whampoa – the parent of rival telecoms company Three.
In a deal worth €850 million, Telefónica has agreed to sell a 100% steak in its subsidiary; O2 Ireland to the Irish arm of Three who will use the new acquisition as a means to expand its mobile coverage, especially to rural areas. What’s more, as a result of the transaction, Three will be able to add some two million new active users to its customer base across Ireland.
An initial payment of €780 million will go to Telefónica, helping them reduce the mountain of debt the company has amassed in recent years, reported to be in the region of €47 billion (approximately £40 billion), which is already a dramatic reduction on the €56.3 billion peak debt they reached in 2011, as stated by the Wall Street Journal.
Telefónica states that, “upon achievement of agreed financial objectives,” it will receive a further €70 million from Hutchison Whampoa. On completion of this transaction, O2 will cease to exist as a brand in Ireland, instead becoming an extension of its new owners, explained Robert Finnegan, CEO of Three Ireland.
With their powers combined, the new O2-infused Three will control 37.5% of the Irish mobile market.