Hutchison Whampoa (HWL), the parent company of UK telecom operator Three has agreed to sell a 33% interest in its UK mobile telecommunications business for £3.1bn to five investors.
The stake is being sold to investors including Canada Pension Plan Investment Board (CPPIB), GIC of Singapore, Limpart Holdings, a subsidiary of the Abu Dhabi Investment Authority, CDPQ of Quebec, and BTG Pactual of Brazil.
The agreements are subject to the completion of Three’s acquisition of O2 UK from Spain-based Telefónica. Earlier this year Hutchison Whampoa had signed a £10.3bn deal to buy O2 to merge it with its UK subsidiary.
Hutchison plans to utilise the full proceeds of the investments, together with a £6bn bank facility, to fund the acquisition of O2 UK from Telefónica that was announced earlier this year.
The combined business of Three and O2 UK will be the number one mobile operator in the UK with about 33 million customers.
HWL Group Managing Director Canning Fok said: "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."
Separately, CPPIB said it will buy a 12% stake in the merged entity by investing £1.1bn. GIC has also committed to invest £1.1bn.
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CPPIB senior managing director & global head of private investments Mark Jenkins said: "We expect this investment will generate attractive long-term risk-adjusted returns, which is appealing for an investor like CPPIB."
