Hutchison to Buy Telefonica’s O2 Ireland

 Telefonica is reportedly close to a deal to sell its Irish subsidiary O2 to Hutchison Whampoa Ltd, a Hong Kong based company.

An agreement may be struck before rival bidders are even due to pitch offers on July 5.Telefonica is eager to secure an accord before it publishes interim results at the end of next month.

Telefonica, Europe’s most indebted telephone company, may raise more than 700 million euros ($925 million) from the sale of its O2 Ireland unit. The Madrid-based company has said it wants to cut its net debt to less than 47 billion euros by year end from about 51.2 billion euros.

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“This is a sensible step toward the company’s goal to cut debt,” said Borja Mijangos, an analyst at Interdin Bolsa in Madrid. “Telefonica will likely sell more assets this year to soothe investors and be in a stronger position for potential M&A activity.”

European telecommunications firms are seeking to consolidate as growth in mobile-data usage slows and heavy regulation slices profits. If Hutchison and Telefonica’s local units merge, Ireland would join Austria and the U.K. among countries that have recently seen the number of mobile operators shrink.

Source: Bloomberg

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