The announcement added that "the timing and amount of these payments will depend on the actual cash flow of the combined businesses".

Hutchison's share price jumped 4 per cent to HK$102.30, minutes after trading in the stock resumed yesterday afternoon, before closing up 2.95 per cent at HK$101.20.

Trading was suspended in the morning as reports of the deal spread.

Li's latest European deal may further stoke talk that he is divesting assets out of Hong Kong and mainland China, an allegation that he has repeatedly denied.

O2 has probably been at the top of the list as a potential acquisition for Hutchison, according to Steven Hartley, the practice leader for service provider and markets at London-based Ovum.

Hartley said the "debt-burdened Telefonica group has openly stated its intent to shuffle its holdings".

"Given that O2 missed out on courting BT in the UK, there's potential for a deal there [with Hutchison] - especially following a separate deal in Ireland," he said.

Hutchison's Three Ireland completed its £780 million purchase of O2 Ireland in July last year.

The new O2 deal comes more than a week after Hutchison's managing director, Canning Fok Kin-ning, assured that the company's strategy in Europe would continue under the restructuring of Li's two conglomerates, Hutchison and Cheung Kong (Holdings), announced on January 9.

A new conglomerate called CK Hutchison Holdings will hold all non-property businesses, including telecommunications, retail, infrastructure, energy, aircraft leasing, and ports and related services. Property businesses will be grouped under Cheung Kong Property Holdings.

"In Europe, we are doing telecommunications consolidation. This is a top priority for us," Fok said. "We've done two [acquisitions on the continent]. There's some more to come."

Hutchison's other recent telecommunications deal was its €1.3 billion (HK$11.6 billion) purchase of Orange Austria in January 2013.

Hartley, however, said some complications might arise as Hutchison planted its flag in more markets across Europe.

"Expansion through consolidation would require integration, which Hutchison hasn't had to do a great deal until now," he said. "It will distract money and personnel away from ongoing operations and can prove very disruptive."

The proposed takeover of O2 in Britain may be complicated since both carriers have existing network-sharing deals with competitors: O2 with Vodafone and Hutchison's Three UK with EE.

Hartley said Hutchison's Three, once the deal is completed, "would jump from being the UK's smallest network operator to become the largest", with about 35 million subscribers, and pare down the number of players in the country from four to three.

Hutchison's "3 Group Europe" telecommunications operations - comprising Italy, Britain, Sweden, Denmark, Austria and Ireland - had 26.9 million customers as of June last year.

Huang Meng, an executive director at telecommunications and internet business-focused Eagle Stone Investment, described Britain as a mature and highly stable telecommunications market in which change could only be made possible through major mergers and acquisitions.

"I think Li is trying to gain users through [mergers and acquisitions] and put hopes on future growth … it reflects a trend of globalisation in the telecommunications industry," Huang said.

Beijing-based Xiang Ligang, the founder of telecommunication portal CCTime, said Li was making a safe bet in its latest push towards European expansion.

"The UK is quite open-minded towards foreign investment, and especially to Hong Kong for historical reasons," Xiang said.