Hong Kong tycoon Li Ka-Shing's Hutchison Whampoa said Friday it is in "exclusive negotiations" to buy mobile phone giant O2 for up to $15.4 billion, in a deal that would create Britain's biggest mobile phone group.

Hutchison confirmed in a statement that it was in talks to buy the company from Spain's Telefonica for �9.25 billion, with a deferred further payment of up to �1 billion after completion of the deal.

It said the deal was subject to due diligence and regulatory approvals, adding: "The negotiations may or may not result in any transaction."

Shares in Hutchison, which had been suspended for a short time Friday morning as reports swirled over the sale, ended up 2.95 percent by the close.

Hutchison already owns Britain's Three mobile phone network and the purchase of O2 would create the country's largest mobile company.

The move comes after Hong Kong investment icon Li -- a former plastic-flower seller who is now Asia's richest man -- announced this month a $24 billion revamp of his vast business empire, and is the latest in a string of purchases.

"Li Ka-shing likes to buy European assets -- one of the reasons is they are relatively cheap," said Kevin Tam, financial analyst at Hong Kong-based Core Pacific-Yamaichi.

The potential acquisition of O2 is part of Li's quest for international diversification and steady growth, Tam told AFP.

"Buying a telecoms company can generate a stable growing cashflow... The capital expenditure requirement is not very demanding and there isn't much fluctuation. Stability is the key," he said.

Hutchison finance director Frank Sixt said the deal would probably face anti-trust scrutiny from the European Commission and would not be closed until mid-2016, according to Bloomberg News.

"I like to think that we can move very quickly in any circumstance, but you have to achieve the right deal for all sides," Sixt said.

He added that the deal would mean Hutchison owns the largest mobile operator in Britain by market share.

- Spending spree -

British telecoms giant BT had said in November that it was in preliminary talks to buy back O2 -- its former domestic mobile phone division -- from Telefonica.

But it then announced in December that it had entered exclusive talks with the owners of EE, another British mobile phone operator, in a deal potentially worth �12.5 billion.

If the O2 merger with Three goes ahead it would leave Britain with three mobile phone networks, down from four, a move some experts say could lead to price hikes owing to a lack of competition.

Last week Li's Cheung Kong Infrastructure Holdings (CKI), and its parent Cheung Kong Holdings bought Britain's Eversholt Rail Group for �2.5 billion.

Eversholt is one of Britain's three main rail rolling stock companies, owning around 28 percent of the country's passenger trains.

That deal was CKI's third investment in the past six months, following the purchase of a stake in Canadian off-airport car park business Park'N Fly in July and the acquisition of Australian gas distribution company Envestra in October.

Hutchison is also looking at merging its Italian mobile unit with a local competitor, Bloomberg News reported, citing people familiar with the matter.

Li, 86, who is worth $30.6 billion according to Bloomberg's Billionaires Index, announced a sweeping re-arrangement of his business empire earlier January.

The new structure will see Cheung Kong Holdings, his flagship firm, take over separately quoted subsidiary Hutchison Whampoa. The combined entity will be split into two, creating a focused property firm and an international conglomerate, including interests in telecoms, utilities and ports.

The revamp is also expected to pave the way for Li's retirement and follows speculation of a handover to his son Victor.

News of the restructuring saw shares in both Cheung Kong and Hutchison -- two of Hong Kong's largest firms -- rise at their fastest rate in more than 15 years.