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Hutchison In Talks To Buy U.K.'s O2: Sunday Times

Hutchison Whampoa Ltd. is in early discussions with Telefonica (TDE.L,TEF) to buy its O2, the Sunday Times reported, citing unnamed sources.

Hutchison, controlled by Hong Kong billionaire Li Ka-shing, may pay as much as 9 billion pounds or $13.6 billion for the Britain's second-largest mobile phone operator, the newspaper said.

O2, which has about 22 million subscribers, was acquired by Spain's Telefonica in early 2006.

The newspaper said it would be the latest deal in a wave of consolidation sweeping through the European telecoms industry. Mobile and fixed-line operators are scrambling to join forces as bundled packages of television, broadband and calls become popular with consumers.

Telefonica has hired investment bank UBS AG to explore options for O2 and Hutchison has hired Moelis & Co to look for possible deals in the U.K., according to the Times.

Last month, BT Group entered into exclusive talks with Germany's Deutsche Telekom AG and French telecom giant Orange SA to acquire EE Ltd. for 12.5 billion pounds, or $19.6 billion, after turning down a takeover of O2.

by RTT Staff Writer

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