Hutchison will float O2 … as soon as the Three merger is done

Brands to stay as they are! Yeah, that's what they all say


CK Hutchison - once known as Hutchison Whampoa* - will float O2 when it merges with Three, pushing the company back into public ownership. The merger is still awaiting regulatory approval, but is expected to go ahead.

The fallout will see the number of mobile operators in the UK dropping from four to three, although given the strength of the rivals (especially in the light of BT buying EE) any regular problems encountered are more likely to be around spectrum re-farming than preventing the deal.

Co-managing director Canning Fok told the Financial Times (paywall) that “there is a liquidity requirement by our investor group and one way to provide that will be an IPO.”

In other words, having spent £10.3bn to buy O2 from Telefonica, and merging it with Three to create a £15bn business, the investors are looking for a return.

In the interview, Fok said Three boss David Dyson will lead the combined company, meaning the boss of O2, the charismatic Ronan Dunne, will step down.

Consolidation is very much the order of the day in the global telecoms market, although the EU Commission recently stepped in to prevent a merger of Telenor and TeliaSonera in Denmark.

Hutchison had no such problems when it took over O2 in Ireland.

Fok also said The Hutch would keep both the Three and O2 brands, but it needs to be borne in mind that companies at this stage of a takeover pretty much always say this. EE said it would keep the T-Mobile and Orange brands ... just before squashing them.

Interestingly, BT has made no such undertaking to keep the EE brand, saying instead that it will investigate what to do with it.

Given that the mobile networks in the UK started with the names Racal-Vodafone, Securicor-Cellnet, One-2-One and Orange (nee Hutchison Telecom), one cannot assume that O2 and EE will be the names on the shop doors in future. ®

Bootnote

Hutchison Whampoa merged with Chinese company Cheung Kong Holdings in June 2015.


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