Hutchison Whampoa-owned mobile operator Three has agreed a deal to acquire Telefónica O2 Ireland.
The €850 million deal includes €780 upfront plus a further €70 million payable dependent upon unspecified financial targets.
The acquisition will take Three's market share to 37.5 percent and bring its subscriber numbers to two million active users.
In a statement, Three said it was “optimally positioned” to become the number one player in the Irish market and planned to invest “strongly” in creating a state-of-the-art network including 4G LTE “over the next number of years”.
Three Ireland CEO Robert Finnegan added: “As an ambitious competitor in the market we have been looking at ways to increase customer numbers and grow market share, and acquisition was the natural next step.
“Our combined 37.5 percent market share gives us the scale and financial strength to compete even more aggressively in the market to the benefit of consumers. Our ability to invest coupled with the combined subscriber base will create new competitive dynamics in the Irish telecoms market.”
Analysys Mason’s Patrick Kidney commented: “What we’ve seen in Ireland over the last five years is a steady decline in retail revenue for the top three mobile operators while Three Ireland has grown both retail revenue and market share of subscribers, albeit from a low base.
"The deal is an ambitious one for Three as it looks to sustain this growth and vie for market leading position with Vodafone Ireland.”
The deal is the second acquisition it has made this year, following the purchase of Orange Austria in January.
Last year, Hutchison Whampoa failed in a bid to acquire incumbent eircom after the latter's outgoing CEO said the Hong Kong-based company didn’t put enough money on the table.
However, it is not yet clear what conditions regulators will attach to any authorisation of the deal.
“A direct pooling of assets would result in Three Ireland holding 30 percent more mobile spectrum than Vodafone. Such a holding would likely provide Three Ireland with an advantage in rolling out 4G LTE, particularly in rural areas,” added Kidney.
For Telefónica, meanwhile, the deal is primarily a debt reduction tool.
In a statement, the Spain-based operator said the sell-off accelerated the deleveraging process and brings it closer to its stated goal to reach a net debt level below €47 billion this year.