Telefonica - O2 Takeover Agreed
Spanish telecommunications company Telefónica today
announced an agreed £17.7bn takeover (€28bn approx)
of O2, to be paid in cash.
Telefónica has substantial interests
in Spain and South and Central America, plus Morocco
and Czech Republic. O2's cellular business is in the
UK, Ireland, the Isle of Man and a large presence in
This merger will create an operator
with net revenues of around €40bn, which compares well
in size terms to Vodafone's €55bn (the world's largest
mobile telco). The merged Telefónica-O2 operation should
have some substantial market influence.
Unlike some recent takeover rumours
(for example Deutsche Telecom and KPN), an O2-Telefónica
merger will be unlikely to run into regulatory difficulties
as there is virtually no overlap in the businesses.
It will also give Telefónica a chance to break out of
Iberian and Latin American markets where they are already
the largest player.
It is understood that O2's branding
will remain and it will continue to be based in the
UK. O2 has been seen as a target for some time because
of its relatively small size and overall profitability.