CK Hutchison, Three’s parent company, is reportedly taking legal action against the European Union (EU) following the collapse of the proposed £10.25 billion merger with rival O2.
The European Commission (EC) blocked the deal on the grounds it would damage competition in the UK mobile market, a view shared by regulator Ofcom and the Competitions and Markets Authority (CMA).
The EC had previously been more open to consolidation, approving the merger of Three and O2 in Ireland for example, but research suggested prices had risen in markets where the number of operators had fallen from four to three as it would have done in the UK.
The ruling has been appealed but it is unlikely the deal would be revived as Telefonica is now working on the reintegration of O2 within the wider group having abandoned plans for a sale.
But legal action would allow Hutchison could also seek compensation and a legal precedent that would make the climate for further consolidation in the market more favourable, according to the Daily Telegraph.
“CK Hutchison can confirm that it has lodged an appeal to the European General Court against the decision adopted by the European Commission on 11 May 2016 to prohibit CK Hutchison’s acquisition of O2 UK,” a spokesperson for the Hong Kong firm told TechWeekEurope.
Three, the UK’s smallest operator, has traditionally been a disruptive force, attempting to differentiate itself from EE, O2 and Vodafone with offers such as inclusive roaming, unlimited data and no additional fees for 4G. If part of a combined O2, it would have had less incentive to do this.
The proposed merged entity would have had more than 40 percent of the UK market, making it the UK’s largest operator. However Three remains the smallest and it is unlikely Hutchison will invest the £5 billion it pledged to if the deal was approved.
German foreign minister warns Russia will face consequences for “absolutely intolerable” cyberattack on ruling party,…
Google is reportedly laying off at least 200 staff from its “Core” organisation, including key…
Investor appeasement? Apple unveils huge $110 billion share buyback program, as sales of iPhone decline…
Tesla retreats from pioneering gigacasting manufacturing process, amid cost cutting and challenges at EV giant
No skynet please. After the US, UK and France pledge human only control of nuclear…
Microsoft's AI investments continue in south east Asia, after investments in Japan, Malaysia, Indonesia, as…