11th May 2016 10:29
LONDON (Alliance News) - Hong Kong's CK Hutchison Holdings Ltd has said is "deeply disappointed" by the European Commission's decision to block its planned takeover of Telefonica SA's O2 mobile network.
The owner of the Three UK mobile network said it would now study the commission's decision in detail and will consider its options, including the possibility of a legal challenge.
The commission said it had blocked the proposed takeover as it had "strong concerns that UK mobile customers would have had less choice and paid higher prices as a result of the takeover, and that the deal would have harmed innovation in the mobile sector."
The takeover had been the source of much opposition over concerns that it would reduce the number of mobile operators in the UK, and media reports in recent weeks had suggested the deal would be blocked by European regulators.
The commission said Wednesday that the takeover would have removed an important competitor and left only two mobile network operators, Vodafone Group PLC and BT Group PLC's EE network. Remedies proposed by Hutchison failed to adequately address the commission's concerns, it said.
"Allowing Hutchison to takeover O2 at the terms they proposed would have been bad for UK consumers and bad for the UK mobile sector. We had strong concerns that consumers would have had less choice finding a mobile package that suits their needs and paid more than without the deal. It would also have hampered innovation and the development of network infrastructure in the UK, which is a serious concern especially for fast moving markets. The remedies offered by Hutchison were not sufficient to prevent this," said Commissioner Margrethe Vestager in a statement.
In a statement, Hutchison said it strongly believes that the merger "would have brought major benefits to the UK", citing a planned GBP10 billion investment in the UK's digital infrastructure, as well as "dealing with the competition issues" surrounding the "current significant imbalance" in spectrum ownership between the UK's mobile network operators.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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