The European Commission is to make a decision about whether to approve the €850 million tie-up between 3 Ireland and O2 Ireland by 6 November.
The purchase agreement for Hutchison 3G UK to acquire 100 per cent of Telefonica’s Irish business was signed in June. The acquirer will pay €780 million in cash on completion, and a further €70 million dependent on meeting certain financial goals.
When the deal was announced, Telefonica said the sale is part of its “ongoing policy of proactive management of its asset portfolio with the aim of increasing the company’s financial flexibility”.
According to GSMA Intelligence, O2 Ireland had an estimated 1.5 million connections at the end of the third quarter, putting it in third place behind Vodafone (2.1 million) and Eircom’s Meteor (1.1 million).
3 Ireland is currently placed fourth with 539,000 connections, meaning the combined business would approach the size of Vodafone, with more than 2 million connections and a 39 per cent market share.
With the deal reducing the number of mobile operators from four to three, 3 may need to offer concessions to the European Commission if competition concerns are raised.
3 UK has previously said the deal will give it “scale and financial strength necessary to compete even more aggressively in the market to the benefit of consumers”, and leaves it “optimally positioned to become the number one player in the Irish market by providing the best value and service to its customers”.
Telefonica is working to reduce its debt including the sale of its Atento call centre business, floating part of its O2 Germany unit, and partnering with Central American investment fund Corporacion Multi Inversiones in this region.