23 Mar Vodafone-Three merger faces competition probe
The UK competition watchdog is planning a full-blown investigation of the £16.5bn merger of Vodafones’ domestic business with CK Hutchison’s Three UK amid concerns that the tie-up threatens choice for consumers
The Competitions and Markets Authority said it would open a “phase 2” investigation into the deal
which is expected to create Britain’s largest mobile operator,
unless the parties can allay its concerns by April 2.
The combination would reduce the number of operators in teh UK from four to three.
The deal was first announced last June after more than a year of talks between the companies
The competitions regulator launched its initial “phase 1” formal probe in January,
after seeking views on whether the deal would harm competition
“The initial assessment of this deal has identified concerns which could lead to
higher prices for customers and lower investment in UK mobile networks”
The CMA has up to six months to cmplete a phase 2 investigation, which is led by an independetn group of experts from different fields, supported by CMA staff.
The companeis said that the CMA’s step was “expected”
and that they “remain confident that the transaction will deliver significan benefits for competition, customers and the country”
“By creating a third player with the necessary scale to invest, the combination of our two companies will deliver one of Europe’s most advanced networks”
If the merger goes ahead, Vodafone will own 51% of the business with an option to acquire the full remaining stake after three years if the entity reaches an enterprise value of £16.5bn.
The companies have said £11bn would be invested over 10 years to support the rollout of sandalone 5G networs
The operators have said there would be no change to their pricing strategies as a result of the merger
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