Hutchison Whampoa and Telefónica near £10.5bn deal on O2

Hutchison Whampoa and Telefónica are close to cementing a £10.5bn deal that would allow the Hong-Kong based group to merge the Spanish company's UK mobile operator O2 to its own British arm Three.

According to various media reports, the deal could be signed “early this week”.

Hutchison Whampoa, owned by Asia's richest man Li-Ka Shing, started exclusive talks with Telefónica in January in order to purchase O2 and merge it with Three to create a company with more than 31m subscribers.

Hutchison said in a press release on Tuesday only that the both companies “continue to be in exclusive negotiations on the definitive agreements for the transaction”.

However, sources told The Wall Street Journal and Financial Times that the final details should be agreed with the deal being signed “soon” and “early this week”, respectively.

Hutchison did warn that any agreement would be subject to regulatory approval and “there is no certainty as to whether [the] transaction would proceed and/or become effective”.