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Iliad founder reportedly still interested in assets expected to be divested if U.K. merger goes ahead.
Iliad founder Xavier Niel recently travelled to Brussels to meet with EU competition commissioner Margrethe Vestager to discuss 3UK’s proposed acquisition of rival O2.
According to a report this week by L’Express, the French businessman still hopes to acquire any assets that are likely to be divested should the European Commission approve the deal.
Brussels is almost certain to demand hefty concessions from 3UK and O2 if it decides to green-light their merger. It is likely that the combined company will have to sell off network capacity and customers in order to get the go-ahead.
Furthermore, CK Hutchison also recently revealed that it is considering selling a stake in 3UK to a new investor in order to help fund its £10.25 billion O2 acquisition, which might also prove attractive to Niel.
Not everyone is convinced though.
"We remain sceptical of the benefits Iliad would have by entering the U.K. market since it has no operations in this market and therefore limited capacity to extract any synergies," said Haitong Research, in a research note on Friday.
However, Haitong added that a 3UK/O2 merger and the subsequent remedies imposed on the deal would create "interesting conditions" in the market. As a result, "one cannot completely rule out the possibility of Iliad or Mr Niel being involved in some discussions."
Indeed, a Financial Times report in January claimed that Niel approached U.K. telco watchdog Ofcom to enquire about the possibility of acquiring assets divested as a result of the deal.
Iliad’s French mobile business Free Mobile has been highly successful in shaking up the mobile market there. Since its launch in 2012, prices have come down and a wave of consolidation has swept across the sector, with Numericable merging with SFR, and Orange currently negotiating an acquisition of Bouygues Telecom.
Meanwhile, the Commission has set a provisional deadline of 19 May for issuing a decision on the 3UK/O2 deal.
