Hutchinson Whampoa sells stake in Three-O2

The parent company of mobile operator Three has finalised an agreement with a group of investors for the sale of the merged Three-O2 UK group for £3.1bn.

The completion of the deal relies on the company gaining approval for its purchase of O2 from Telefonica, for which it still requires permission from the European Commission.

Group managing director of Hutchison Whampoa said: "The investors share our vision and belief in the value of creating a business with the necessary scale to enable us to compete effectively in the UK marketplace and to provide even better service and innovation using the largest and most resilient and advanced mobile network infrastructure in the country.

"Like us, the willingness of these investors to commit substantial capital to this investment reflects continued confidence in the UK economy and its commitment to maintain and foster a dynamic and world leading telecommunications sector, as well as a vote of confidence in Europe’s plans for a single market in digital communications, leading to increased investment in the telecoms sector."

The institutional investors are Canada Pension Plan Investment Board, GIC of Singapore, Limpart Holdings, CDPQ of Quebec, Canada and BTG Pactual of Brazil.

The merger of O2 with Three will create the UK's largest mobile operator, with almost 33m customers.

Hutchinson is planning to pay a total of £10.25bn to acquire the network.

The news comes as telecoms giant BT gears up to its submission to the Competition & Markets Authority for its planned takeover of mobile phone operator EE.

The move has been strongly supported by BT shareholders, but faces opposition from other mobile phone companies who claim its share of the market will be too great if the deal completes.