European competition watchdogs will not clear CK Hutchison’s £10.25 billion takeover bid despite months of negotiations, Reuters claims
The European Commission is set to block CK Hutchison’s plans to buy O2 in a £10.25 billion deal, according to people close to the negotiations.
Citing two separate sources, Reuters claims the Three-owner’s bid to create the UK’s biggest network with around 35 million customers will be be vetoed by European Competition Commissioner Margrethe Vestager.
It follows almost a year long negotiation process in which Hutch has offered numerous concessions in an attempt to drive through the acquisition of Telefonica’s UK assets.
A source close to the deal told Reuters Vestager will this week seek approval from national regulators for approval of its decision to reject the deal. The Competition and Markets Authority, which is the regulator in the UK, has already expressed its opposition to the takeover.
The EC has set a deadline of May 19 to reach a decision over the deal, which was agreed in January of last year.
Concessions offered by Hutch to drive through the deal, include offering a five year price freeze for Three customers should it be approved. It also reached agreements to give up around 30 per cent of its combined spectrum to rivals including Virgin Media, Sky and its stake in Tesco Mobile to the retailer.
Despite the offer of concessions, Vestager has previously expressed her wish for the UK to maintain at least four network operators. If a deal was approved, it would see the number fall from four to Three.
CK Hutchison, O2 and the EC were all unavailable for comment.