The U.K. competition watchdog is considering asking the European Commission for the right to examine CK Hutchison’s proposed acquisition of O2 UK.
The Competition and Markets Authority (CMA) on Wednesday invited comments on the proposed merger of 3UK and O2. It is seeking views on the impact of the deal on competition in the U.K. market and on whether it would be appropriate for the case to be referred to the CMA for investigation.
The invitation to comment closes on 24 September. The CMA did not say when it will make a decision on the European Commission request.
"If any such request were made by the U.K. and the Commission decided to grant such a request, the CMA would examine the proposed merger further with a view to deciding whether or not it should be referred for an in-depth investigation under the provisions of the Enterprise Act 2002," the CMA said.
CK Hutchison agreed to acquire Telefonica’s O2 unit in the U.K. in March for £10.25 billion and submitted the proposed deal to the European Commission for examination late last week. The Commission’s competition department has set a provisional deadline of 16 October to make a ruling on the case.
The submission coincided with the collapse of the planned merger between Telenor and TeliaSonera in Denmark. The telcos pulled out of their deal having failed to reach agreement on competition remedies with the European Commission.
New competition commissioner Margrethe Vestager insists that Denmark requires four mobile operators in order to protect competition, something that could be bad news for Hutchison, since the 3UK/O2 tie-up also reduces the number of players in the U.K. market to three.
However, the competitive dynamics of the two markets are different – following the 3UK/O2 merger the U.K. would be left with three strong players of roughly equal size, for example – and Vestager herself has been keen to note that she will judge each consolidation case on its own merits.
