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Supermarket reportedly keen to buy O2 out of 50:50 MVNO joint venture.
Supermarket Tesco on Wednesday confirmed it is interested in 3UK’s proposed acquisition of rival O2, following a report that it is keen to take full control of its MVNO joint venture with the latter.
"Tesco is an interested party in the merger review process," said a Tesco spokesman in an email to Total Telecom. "It is important that any landscape created by the merger process allows challenger brands, such as Tesco Mobile, to deliver the best possible services for U.K. customers, and champions consumer choice."
Tesco owns half of Tesco Mobile, the U.K.’s biggest mobile virtual network operator. It leases network capacity from O2, which owns the other half of the venture.
The statement was issued after the Telegraph on Tuesday reported that Tesco is keen to buy O2’s Tesco Mobile stake. Unnamed sources said Tesco also hopes to strike a long-term deal with 3UK parent CK Hutchison for wholesale access to 3UK’s and O2’s merged mobile networks.
Of course, the merger must be approved by the EU’s antitrust watchdog before that can happen.
The European Commission is in the midst of an in-depth investigation into 3UK’s £10.25 billion (€13.29 billion) buyout of O2.
The deal, which will reduce the number of mobile operators in the U.K. to three from four, is likely to be subject to tough concessions designed to safeguard competition. There is also a chance that it could be blocked altogether if the two sides are unable to reach an agreement.
According to the Telegraph’s sources, Hutchison is in favour of O2 selling its Tesco Mobile stake because it believes the Commission will look more favourably on the tie-up if Tesco Mobile becomes an independent player.
Earlier this week, Reuters reported that Hutchison has held "fruitful" talks with the Commission during closed-door meetings, as it seeks to win approval for the multi-billion pound O2 deal.
