BILLIONAIRE Li Ka-shing's Hutchison Whampoa Ltd has agreed to buy Telefonica SA's Irish unit for as much as 850 million euros (US$1.1 billion), a year after failing to take over Ireland's former phone monopoly Eircom Group.

Hutchison's Three Ireland, the country's third-largest wireless carrier, will pay 780 million euros in cash and an additional 70 million euros upon meeting certain performance targets, the companies said yesterday. The combination with Telefonica's O2, Ireland's No. 2 mobile operator, will increase Hutchison's customers to about 2 million and its wireless market share to 37.5 percent, the Hong Kong-based company said.

Three Ireland's 2 billion-euro bid for Eircom was rejected last year by the examiner overseeing a court-supervised debt restructuring of the phone company, the country's largest. Hutchison, the biggest Asian investor in European wireless assets, completed the takeover of Orange in Austria this year, and is evaluating a merger of its Italian unit with Telecom Italia SpA.

The deal will give Three Ireland "the financial strength to be more aggressively competitive in the Irish marketplace," CEO Robert Finnegan said.

European telecommunications companies are seeking to consolidate as growth in mobile-data usage slows and increasing regulation damps profit increases. Three Ireland will consider whether its network-sharing agreement with Vodafone Group Plc or 02's network partnership with Eircom is best for the combined Three-02 Ireland business, Finnegan said.

The deal values Telefonica's Irish unit at 7.1 times earnings before interest, tax, depreciation and amortization estimated by analysts for this year. In 57 worldwide acquisitions of wireless phone carriers over the past decade, the median Ebitda multiple was 8.42, according to data compiled by Bloomberg News.

The transaction has the potential to bring Telefonica, Europe's most-indebted carrier, closer to a goal of cutting net debt to less than 47 billion euros this year.

Vodafone remained Ireland's biggest wireless carrier, with a 45.3 percent share of the country's mobile revenue in the first quarter, according to Dublin-based regulator ComReg.