News
Hong Kong telco’s European division challenges European Commission’s decision to stand in the way of its O2 UK acquisition.
CK Hutchison has launched a legal challenge against the European Commission’s decision to block its plan to acquire O2 in the U.K. and merge the business with its own 3UK operation.
When Brussels refused to sanction the O2/3UK merger in May, Hutchison said it was considering the options open to it, including the legal route.
On Monday a spokesperson for the company confirmed to Total Telecom that it has launched a legal challenge against the ruling.
"CK Hutchison…has lodged an appeal to the European General Court against the decision adopted by the European Commission on 11 May 2016 to prohibit CK Hutchison’s acquisition of O2 UK," the operator said, in a statement.
It is unclear at this stage what the outcome of the appeal could be. Even if Hutchison were to win, it may not be in a position to revive the U.K. deal.
O2 parent Telefonica has made it clear that it is considering various alternatives for its operations in the U.K. There has been widespread speculation that it could seek to offload the business via a management buyout or flotation, but last month the Spanish operator revealed that it no longer classes its U.K. assets as ‘held for sale’, suggesting that a quick decision is unlikely.
Hutchison, meanwhile, appears to have been more successful with its M&A plans elsewhere in Europe.
The European Commission has until 8 September to publish its decision on Hutch and VimpelCom’s plan to merge their Italian operations into a 50:50 joint venture and the signs suggest it will be a positive outcome for the telcos. The pair have agreed to sell assets to France’s Iliad, enabling it to launch as a new mobile network operator in Italy, a move that should smooth the way among the competition overlords in Brussels.
