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Brussels will publish statement of objections to 3 Italia/Wind tie-up in June, sources say.
The European Commission will publish a statement of objections to CK Hutchison and Vimpelcom’s plan to merge their Italian telecoms business in June, it emerged on Wednesday.
The document will contain details of the Commission’s concerns about the impact of the €21.8 billion merger on competition in the Italian mobile market, Bloomberg quoted two anonymous sources as saying.
The statement of objections is not an unusual occurrence when it comes to major European mergers and does not necessarily mean that the deal will be blocked.
However, it does suggest that Brussels will at least require the two parties to agree to certain conditions designed to protect competition, such as the sale of spectrum or network capacity, or the establishment of favourable conditions for new players, for example.
It is not at all surprising that the proposed tie-up has triggered competition concerns.
The merger of 3 Italia with Wind – the parent companies have agreed to bring the two businesses together via a 50:50 joint venture – will create a new leader in the Italian mobile market. According to regulator Agcom, Wind and 3 Italia together claimed a market share of 33.7% at the end of last year, putting them ahead of current leader Telecom Italia which had 32.4% and Vodafone with 26.4%.
The European Commission is undertaking an in-depth review into the merger, at the same time as it is examining the implications of Hutchison’s plan to acquire O2 in the U.K. and merge it with its local 3 unit.
Sources cited by both Reuters and Bloomberg in the past few days have intimated that the Commission will soon announce that it is blocking the U.K. deal on competition grounds. Naturally, if and when that announcement comes, it will raise speculation that the Italy deal could face a similar fate.
