Spain's Telefonica said Tuesday it will sell British telecom giant O2 to Hong Kong group Hutchison Whampoa for £10 billion in a deal set to create one of Britain's biggest mobile phone firms.
"A definitive agreement has been reached after the finalisation of the process of due diligence on O2 UK," the Spanish firm said in a statement, adding the deal was worth equivalent to 14 billion euros ($15.2 billion.)
Subject to regulatory approval, Hutchison Whampoa will make an initial payment of 9.250 billion pounds and a further 1.0 billion later once O2 reaches an agreed cash flow level.
The deal is due to be wrapped up by June 30, 2016 -- a deadline that may be pushed back to September 30, 2016 in certain circumstances, Telefonica said.
It is the latest purchase in a spending spree for Hutchison's owner, Hong Kong investment tycoon Li Ka-shing, ranked as Asia's richest man.
Hutchison already owns Britain's Three mobile phone network.
Li's group said in January that the deal would make it the owner of the largest mobile operator in Britain by market share.
It was also the latest in a series of shake-ups in Britain's telecom sector.
British telecoms and TV firm BT had said in November that it was in preliminary talks to buy back O2 -- its former domestic mobile phone division -- from Telefonica.
Instead BT bought another British mobile phone operator, EE, for £12.5 billion.
British telecom giant Vodafone took over Spanish cable firm Ono in July 24 for 7.2 billion euros.
Li, 86, who is worth $30.6 billion according to Bloomberg's Billionaires Index, announced a sweeping re-arrangement of his business empire in January.