Telefonica enters into a $31.4 billion deal to acquire O2

Telefónica, Spain’s biggest telecom group, has entered into a ??17.7 billion ($31.4 billion) deal to acquire the UK’s second largest mobile operator, O2. The all-cash deal is priced at ??2 per share, and follows recent interest expressed in O2 by KPN of the Netherlands and Deutsche Telekom of Germany. If completed, the deal will make Telefónica the world’s second largest listed international telecom group by market capitalisation, behind the UK’s Vodafone. O2 will add 24.6 million clients in the UK and Germany to Telefónica’s 90 million-strong subscriber base, which is mainly in Latin America and Spain. The acquisition is expected to be completed in January.