Three's parent company Hutchison Whampoa has agreed to acquire O2 for £10.25bn in a move that will radically shake up the UK mobile market.
Three and O2 entered into discussions about a potential acquisition in January, and a notice on the Telefonica website now confirms that the price has been agreed.
"Telefónica informs that a definitive agreement has been reached after completion of due diligence over O2 UK," Telefonica said.
"The parties agreed on a purchase price of £10.25bn. The price is composed of: i) an initial amount of £9.25bn and ii) an additional deferred payment of £1bn".
In a statement Ronan Dunne, CEO of O2 in the UK, said that the deal would be a huge boost for customers of O2 and the UK as a whole.
“O2's vision has always been to provide the very best customer experience. Subject to regulatory approval, the deal that has been agreed today will result in the creation of the most customer-centric mobile operator in the UK," he said.
V3 contacted Three for comment on the news but had received no reply at the time of publication.
The note on the Telefonica website says the deal must be completed by 30 June, 2016.
It remains to be seen whether Three will retain the O2 brand or not, as O2 is considered one of the strongest brands in the mobile market, having been a major player in the telecoms industry for over ten years.
The move will also mean Three becomes a business mobile provider by acquiring O2' business customers, something it has avoided in the past due to its focus on the consumer market.
The move comes amid another major deal in the UK telecoms market that has seen BT enter into an agreement to purchase EE for £12.5bn, as it looks to return to the UK mobile market after a ten-year plus hiatus.
Both deals are likely to come under significant regulatory scrutiny as it means the UK market will fall from four to three mobile operators, something Ofcom has strived hard to avoid in the past, notably with the 4G spectrum auctions of 2013.
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