CK Hutchison considers legal challenge following Three/O2 merger block

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The European Commission announced its decision to block the merger today (May 11)

CK Hutchison is considering making a legal challenge following the European’s Commission’s decision to block its proposed £10.25 billion takeover of O2.

The European Commission announced its decision to prohibit the merger between Three and O2 today (May 11). European Commissioner Margrethe Vestager claimed the block had been subject to more than a year of negotiations between the Three parent company and Brussels. She said the deal would have damaged innovation in the mobile sector.

Both Ofcom and the Competitions and Markets Authority had also previously raised concerns to the EC. They claimed a successful merger would reduce the number of operators in the UK from four to three and harm competition.

A spokesperson from CK Hutchison said the company would study the decision in more detail and claimed a successful merger would improve the UK’s mobile coverage, network capacity and speed. They wrote in a statement: “We will be considering our options, including the possibility of a legal challenge.

“We strongly believe that the merger would have brought major benefits to the UK, not only by unlocking £10 billion of private sector investment in the UK’s digital infrastructure but also by addressing the country’s coverage issues, enhancing network capacity, speeds and price competition for consumers and businesses across the country and dealing with the competition issues arising from the current significant imbalance in spectrum ownership between the UK’s MNOs.”

Hutchison confirmed it would now focus on working with the Commission towards clearing a proposed merger with Italian mobile operator Wind and Three Italia.

Reaction

O2 CEO Ronan Dunne has not yet commented on the Commission’s decision, but tweeted this shortly before it was released.

At @O2 our customers are our priority and we will continue to differentiate, compete fiercely and remain successful long into the future

— Ronan Dunne (@ronandunneo2) May 11, 2016

 

 

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