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Three's takeover of O2 blocked

Posted by Kerrie P on 11/05/2016

The European commission has blocked Three’s £10.25bn takeover of O2 on competition grounds, more than a year after the deal to form Britain’s biggest mobile phone operator was announced.

Margrethe Vestager, the commissioner for competition, announced the decision at a news conference on Wednesday, just over a week before the 19 May deadline. She said the takeover would probably have increased prices and reduced choice for consumers by placing too much power in one mobile operator.

 

Hutchison Whampoa, the Hong Kong conglomerate that owns Three, agreed in March 2015 to buy O2 from Telefónica of Spain. The deal would have transformed Three from the smallest to the biggest mobile operator in the UK. It would have given Hutchison more than 40% of UK mobile phone users with in excess of 30 million customers and reduced the number of network owners from four to three: Hutchison, Vodafone and BT, which has bought EE.

 

Vestager said: “The commission has decided to block Hutchison’s plan to take over O2 in the UK. This transaction would have created a market leader, a market leader that would have had influence over mobile network infrastructure in the UK.“Our investigation revealed significant competition concerns with this deal. It would very likely have led to higher prices and less choice for UK consumers. Innovation in the very important in the very important mobile sector would then have been harmed.”

 

Hutchison said it was deeply disappointed by the commission’s decision and that it would consider an appeal once it had studied the ruling in detail.

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