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UK antitrust regulator begins investigation of Vodafone-Hutchison merger

2024.02.02 13:19


© Reuters. Branding is displayed for Vodafone at one of its shops in London, Britain, June 14, 2023. REUTERS/Toby Melville/ File Photo

LONDON (Reuters) -Britain’s antitrust watchdog has launched an investigation into the $19 billion merger between Vodafone (NASDAQ:)’s UK operation and CK Hutchison’s Three UK, reviewing whether or not the deal will damage competitors, it stated on Friday.

The tie-up introduced final 12 months will cut back the quantity of cellular networks in Britain from 4 to 3.

The Competition and Markets Authority (CMA) has 40 working days to finish its preliminary investigation, which is prone to result in an in-depth, section two probe lasting 24 weeks.

“This deal would bring together two of the major players in the UK telecommunications market, which is critical to millions of everyday customers, businesses and the wider economy,” stated CMA Chief Executive Sarah Cardell.

“The CMA will assess how this tie-up between rival networks could impact competition before deciding next steps.”

The corporations pledged to take a position 11 billion kilos ($14 billion) to create “one of Europe’s most advanced standalone 5G networks” in an effort to win over politicians, unions and competitors authorities.

Vodafone UK​ Chief Executive Ahmed Essam, who will lead the mixed group, stated shoppers would profit.

“We look forward to continuing the constructive conversations (with the CMA) now that the formal process has begun,” he stated.

Regulators have beforehand blocked some offers that cut back the quantity of networks from 4 to 3.

A 2016 British merger between Three UK and Telefonica (NYSE:)’s O2 was stopped by the European Commission as a result of it was thought of prone to lead to larger costs.

After Brexit, it is going to be as much as the CMA to rule on the Vodafone-Three deal.

Last 12 months the CMA blocked Microsoft (NASDAQ:)’s $69 billion acquisition of Activision Blizzard (NASDAQ:) however later permitted the deal after reopening the case.

The CMA may block the Vodafone deal or settle for it, with or with out treatments. Cardell stated in November that the CMA most popular structural treatments.

($1 = 0.7852 kilos)

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