Hong Kong's Li Ka-shing to buy Britain's O2: reports

[HONG KONG] Hong Kong tycoon Li Ka-Shing's Hutchison Whampoa is set to buy UK mobile phone giant O2, reports said Friday, the latest in a spree of overseas acquisitions by the billionaire.

The move, which reports said could create Britain's biggest mobile phone group, comes soon after the investment icon announced a major revamp to streamline his vast business empire.

Hutchison is "close to a deal" to buy the phone operator from Spanish company Telefonica for more than £10 billion (US$15 billion) according to Bloomberg News, which cited two people with knowledge of the matter.

The agreement could be announced as soon as Friday, the sources said.

Hutchison already owns the UK's Three mobile phone network and the purchase of O2 would create the country's largest mobile company, the Financial Times said.

A spokesman for the Hong Kong company could not immediately be reached for comment.

Trading in Hong Kong-listed shares of Hutchison Whampoa was suspended Friday morning, seen as a signal of an impending deal.

Last week Li's Cheung Kong Infrastructure Holdings (CKI), and its parent Cheung Kong Holdings bought Britain's Eversholt Rail Group for £2.5 billion.

Eversholt is one of Britain's three main rail rolling stock companies, owning around 28 per cent of the country's passenger trains.

That deal was CKI's third investment in the past six months, following a stake in Canadian off-airport car park business Park'N Fly in July and the acquisition of Australian gas distribution company Envestra in October.

Both the O2 and Eversholt buys come just after 86-year-old Li announced a sweeping re-arrangement of his vast business empire this month.

The new structure will see Cheung Kong Holdings, his flagship firm, take over separately quoted subsidiary Hutchison Whampoa. The combined entity will be split into two, creating a focused property firm and an international conglomerate, including interests in telecoms, utilities and ports.

The revamp is also expected to pave the way for Li's retirement and follows speculation of a handover to his son Victor.

News of the restructuring saw shares in both Cheung Kong and Hutchison - two of Hong Kong's largest firms - rise at their fastest rate in more than 15 years.

Li, who is worth US$30.6 billion according to Bloomberg's Billionaires Index, started out in business as a plastic-flower maker.

AFP