Brussels to block Three-O2 mega-merger

Mon, 18 Apr 2016 | MERGER

Antitrust regulators in Brussels are in the process of blocking the proposed merger between mobile operators Three and O2, according to several recent reports.

Three’s owner CK Hutchinson has proposed a deal worth £10.5 billion to acquire Telefonica’s UK business O2. However, the EU’s antitrust watchdog is reportedly in the process of stopping the merger, unless further concessions are put on the table.

The UK-based Competition and Markets Authority (CMA) recommended that Brussels takes action to block the move only a few days before the latest news. The UK regulatory body Ofcom has also come out against the proposed deal between the mobile operators. Both bodies fear that the deal would reduce competition in the UK mobile market and harm consumer choice.

The EU competition commissioner Margrethe Vestager said on Wednesday 13 April that she would take account of the strong resistance to the move in the UK.

Although no final decision has taken place, she said: “They work the same way as we do, so of course I take due note of what the regulators and the competition authority has said in this case.”

One proposal put forward by British competition authorities is that Three divides its operations to create a fourth mobile operator in the country, effectively replacing O2.

If the block goes ahead, CK Hutchinson is expected to appeal the decision — a process which could take up to a year before a final decision is reached.

For more information on this subject, see the following resources on post-merger integration.


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