Three UK owner Hutchison Whampoa 'in talks' to acquire O2 for £9bn

Hong Kong conglomerate returns fire after BT's purchase of EE

Hutchison Whampoa, the owner of mobile phone provider Three in the UK, is reportedly in talks to acquire its rival O2.

According to "city sources" close to the Sunday Times, the company, owned by Hong Kong business tycoon Li Ka-shing, hopes to seal the deal for £9bn.

O2 Ireland is already owned by Hutchison Wampoa, after a £650m acquisition from Telefonica in 2013. Telefonica still owns O2 UK, so a sale seems to make sense in terms of reconnecting both the UK and Ireland pieces of the company under the same umbrella.

Hutchison Wampoa's move to pick up O2 can be seen as a reaction to BT's recent £12.5bn bid for EE.

Three buying out O2 would effectively create the largest mobile phone operator in the UK, with about 34 per cent of the market.

Spanish company Telefonica is also struggling to control debts after the economic recession hit Spain particularly hard, so a sale could well be on the cards.

Consolidation of mobile communications firms in the UK seems to be a wheel that's now in full spin, with BT's entry into the market looking to kick off a serious race for increasingly wide ownership of coverage and customer bases.

While there's been no talk of investigation of these large firms' ambitions for mobile, it was widely reported in December 2014 that BT is already planning to challenge Ofcom's ongoing attempts to control BT's pricing for broadband next to its rivals at Sky and TalkTalk.

It doesn't seem such a leap to imagine BT beginning to offer mobile and home broadband packages which could, theoretically, undercut rivals in both industries - especially as BT owns much of the physical infrastructure required to run both services.

BT also registered interest back in November 2014 to buy back O2 itself - after selling the company to Telefonica in 2005. While it seems unlikely the company would be allowed to buy both, Hutchison Whampoa's swift reaction is a savvy move before somebody else fields the finance.

Hutchison Whampoa, an amalgamation of two Hong Kong-based international trading firms founded in the 19th century, owns several other interests in the UK including Superdrug, budget drugstore Savers and The Perfume Shop.