EU regulators reject UK’s request to examine O2 and Three merger

The European Commission rejected the UK competition authority’s request to examine the planned acquisition of Telefonica UK (O2) by Hutchison, a deal which would create the country’s biggest mobile operator in terms of market share.

EU antitrust regulators believe that the EC is better placed to ensure consistency of the transaction given its “extensive” experience in the sector.

The EC pointed out that it has run several similar investigations in recent years in both mobile and fixed sectors in Denmark, Germany, Ireland, Netherlands, Spain and the UK.

In October the U.K.’s Competition and Markets Authority asked to take over the probe given the fact that it was already investigating a separate merger in the sector between BT Group Plc and EE Ltd.

An EU executive was quoted by Reuters as saying:

“The (European) Commission concluded that, given its extensive experience in assessing cases in this sector, it was better placed to deal with the transaction and ensure consistency in the application of merger control rules in the mobile telecommunications sectors across the European Economic Area,”

Li Ka-shing’s Hutchison agreed to acquire the O2 unit in March for £10.3 billion. The deal would create the UK’s largest mobile network, with 41% of the market share – compared to EE’s 32% and Vodafone’s 24%.

the EU ruling, the CMA said it intends “to make representations on the competition impact of the merger in the U.K. as well as on potential remedy proposals made by the parties.”