Hutchison (owners of Three) badly wanted to grab O2. Following disapproval by UK competition watchdogs, they tried everything to change minds. They added guarantees that prices for O2 and Three customers would be frozen for five years. They’d also promised £5 billion of investment and to open their new joined network to rivals.
However, it came to nothing and now the EU has blocked the planned takeover, citing concerns over reduced customer choice and possible price increases. This despite those earlier promises, which were “not sufficient”.
The deal, said to be worth £10.3 billion, would leave the UK with just three major networks. The EU competition commissioner, Margrethe Vestager, stated that she had strong concerns..
The goal of the EU merger control is to ensure that tie-ups do not weaken competition at the expense of consumers and businesses. We want the mobile telecoms sector to be competitive, so that consumers can enjoy innovative mobile services at fair prices and high network quality.
Hutchison are considering a legal challenge to this decision.
Update – Liberty Global, the cable company that owns Virgin Media, have now signalled interest in buying O2. Interesting times.