Billionaire Li Ka-Shing’s Hutchison Is in Talks to Buy UK’s O2 for as Much as $15 Billion

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Li Ka-shing’s Hutchison Whampoa Ltd. (13) started exclusive talks to buy O2, Telefonica SA’s (TEF) U.K. wireless carrier, for as much as 10.25 billion pounds ($15 billion) in the biggest overseas purchase by the billionaire.

The owner of the Three mobile-phone network in the U.K. will pay an initial sum of 9.25 billion pounds in cash, Hutchison said Friday. It may pay as much as 1 billion pounds extra after the completion of the deal, which will create Britain’s biggest wireless provider by number of subscribers.

The U.K. is primed for more deals after wireless-market leader EE began negotiations to be acquired by BT Group Plc, leaving smaller carriers looking for ways to compete. O2 had been in talks about a combination with BT, and was left out after the former U.K. phone monopoly chose EE. Hong Kong-based Hutchison is stepping in two weeks after Li announced a $24 billion plan to merge his two main holdings companies.

“They are looking for businesses that offer steady and reliable return,” said Ben Kwong, a director at the brokerage KGI Asia Ltd. in Hong Kong. “They are finding now that there are a lot of opportunities overseas, where asset prices are low with the economy not doing well.”