The two companies have entered several weeks of negotiations with Telefónica over the potential acquisition, according to Hutchison.
The proposed deal includes a purchase price of £9.25 billion in cash and deferred upside interest sharing payments of up to a further £1 billion.
Hutchison already owns Three and acquiring O2 would make it the largest mobile operator in the country by subscribers. In 2013, it bought Telefonica’s Irish unit for approximately €850 million.
The merger of Three and O2 is the latest move towards consolidation in UK market, after BT announced last December that it had entered into exclusive talks to buy EE for £12.5 billion.
If successful, the deal will also help Telefónica significantly reduce its debt. “Today’s agreement shows that Telefónica continues to lead the European consolidation process and it will allow the company to strengthen its financial flexibility,” the Spanish carrier said.
