Debt-laden Spanish mobile phone operator Telefonica has agreed to sell its Irish subsidiary to Hong Kong-based conglomerate Hutchison Whampoa for up to €850 million (£725m).
The group said the sale of O2 Ireland to the parent company of mobile network Three would slash its debt pile by about €780m, bringing it closer to a target of reducing its debts to below €47bn this year.
Telefonica, which bought UK mobile network O2 for £18bn in 2005, said it will receive an initial €780m in cash for its Irish arm, with a further €70m due “based on the completion of agreed financial objectives”.
Three Ireland chief executive Robert Finnegan said the deal, which is subject to regulatory approval, would boost the firm’s market share to 37.5 per cent and bring its number of active users to two million.
He added: “The combined network will also deliver very real benefits to customers outside the major urban areas as the increased scale will allow Three to extend its rural network investment programme beyond 2014.”