Hong Kong billionaire Li Ka Shing's Hutchison Whampoa is looking to acquire Telefonica SA's wireless unit O2 in the UK, as the telecoms giant looks to expand in Europe.

The Sunday Times reported that Hutchison may pay as much as £9bn ($13.6bn, €11.8bn) for O2 UK. The newspaper added that the discussions are at an early stage and there is no surety that a deal will be reached.

If successful, the bid would combine the UK's second-largest telecom operator with its small peer, Three, which is already owned by Hutchinson.

The UK's mobile market has recently been consolidating, with its large players deciding to merge operations. BT, former owner of O2, reached a preliminary agreement to buy peer EE for £12.5bn in late 2014.

Telefonica, which is suffering from a huge debt burden, is looking to exit its UK operations. The company hired investment bank UBS Group AG to explore options for O2, including a share sale to the public.

With the move, the Hong Kong firm is looking to expand its operations in Europe. Hutchison already has operations in the UK, Italy, Sweden, Denmark, Austria and Ireland through its subsidiary 3 Group Europe, which had sales of $4bn in the first half of 2014, a 3% rise from the previous year.

Li is reorganising his two main companies, real estate major Cheung Kong Holdings and Hutchison, and is weighing more acquisitions outside his home market. In 2014, Hutchison completed the takeover of Telefonica's Irish unit for as much as €850m to combine it with Three Ireland.