Li Ka-shing goes shopping – with preference in the United Kingdom: After beginning the week of 1.1 billion pounds, about 1.46 billion euros, the UK rail operators Eversholt Rail paid and now owns nearly 30 percent of driving in the UK trains still put Asia’s richest man on Friday more money on the table.
The chief executive of the Hong Kong conglomerate Hutchison Whampoa Limited (HWL) plans for the Telefónica O2 UK subsidiary to pay up to 10.25 billion pounds, the equivalent of 13.67 billion euros in cash and merge it with their own mobile operator Three. So the deal is concluded, however, must still be approved by the competition authorities. The number of mobile providers in the UK would be reduced after the merger of three.
Hutchison Whampoa should already have been interested in an acquisition in the UK mobile market for some time. The possibility was low, said Frank Sixt, Finance Director of Hutchison Whampoa, on Friday in a conference call.
The proposed acquisition of competitor EE by the former state-owned company British Telecom, the end of December was announced, “may have given us an opportunity,” Sixt said. The purchase of O2 UK but was into the mobile business no direct response to the re-entry of BT. “We do not respond,” Sixt said, “Our strategy is to be a consolidator for mobile business.”
The exclusive talks with the Spanish mobile operator Telefónica will take several weeks, according to Hutchison Whampoa. “There is no transaction until the risk assessment has not been completed and we have exact agreements,” said Finance Director Sixt.
Rising prices for mobile customers?
In this case, the purchase would be completed by mid-2016. “When it is completed, we will be merging Three and O2 in the UK,” said Sixt. The new company would, according to the information service provider IHS Technology has a market share of 39 percent, followed by EE with 29 percent and Vodafone with 24 percent.
With the proposed acquisition unit of British mobile market in motion. The competition authority Ofcom is currently in the process to consider the bid of BT for EE. There is concern that the telecommunications provider receives with the purchase of EE in a dominant position that could be detrimental to the broadband provider TalkTalk and Sky. Also, the concentration of O2 UK and Three must be approved by the competition watchdogs.
Hutchison Whampoa wants to turn the European Commission for this purpose. Both in Austria and in Ireland and Germany, the Commission had the reduction from four to three providers “judged positively,” said Sixt. “We believe that a substantial likelihood that a permit can be given.”
Analysts say it however possible that the merger of the two suppliers long term leading to higher prices for mobile customers. “The big question is whether the consolidation will result in higher prices,” said Mark Newman, Senior Research Fellow at the consulting firm Ovum, told the BBC. “If you look at the Austrian market, it looks as prices have risen since the reduction from five to three providers.”
Hutchison Whampoa urged shareholders and potential investors because of the pending approval of caution. “These negotiations may result in a transaction or not,” the company’s largest acquisition in Europe wrote in a note to the Hong Kong Stock Exchange.<"prefix_1" h2 class =>
” Shareholders and investors should therefore be careful when trading with shares of the company. ” The stock market reacted nevertheless positively to the announcement, the Hutchison shares was at times four percent increase.
According to Director of Finance Sixt the acquisition would be of O2 the largest acquisition, the Hutchison Whampoa has been made in Europe. Chairman Li Ka-shing has according to media reports already spent over 20 billion pounds, the equivalent of about 26.65 billion euros, in the United Kingdom. His Cheung Kong Group bought 2010, the British power plant business by EDF on, for 5.8 billion pounds, about 7.73 billion euros.
Only top the week of the 86-year-old had made headlines when he rose nearly a third of moving trains in the UK with the purchase of the railway operator Eversholt Rail. The widower for 17 years, the richest man in Hong Kong and currently stands, according to “Forbes” with assets of 33.5 billion dollars converted 29.8 billion euros, Alibaba founder Jack Ma.
Ma currently comes through loud “Forbes” on a fortune of 23 billion dollars, about 20.4 billion euros; he had Li temporarily overtaken last December, the richest man in Asia. According to calculations by Bloomberg Lis companies have announced for this year deals worth more than 45 billion dollars, the equivalent of around 40 billion euros.
Li Ka -shing earned his first billion with plastic factories, before he went into the Hong Kong real estate business and invested in infrastructure and retail companies. He currently has more than 270,000 employees in 52 countries. In addition to its acquisitions abroad currently employ him above all the restructuring of its two conglomerates Cheung Kong Holdings and Hutchison Whampoa. Li announced to merge the two companies, but outsource their respective real estate business and take it to the Hong Kong Stock Exchange.