The European Commission has banned the absorption of O2 holding CK Hutchison for 10.5 billion pounds

Recently it became known that the European Commission is blocking the merger of CK Hutchison and Telefonica O2 in the UK. The deal was originally concluded a year ago - then the leadership of CK Hutchison decided to take over the O2 operator and merge it with its own unit Three in the UK for £ 10.5 billion.

Thanks to this deal, the largest operator could appear in the UK market, and representatives of CK Hutchison argued that it was necessary to compete with BT after acquiring EE for £ 12.5 billion last year. However, representatives of the European Commission did not agree with this, as a result of banning the merger.
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“We want the telecommunications segment to remain competitive, so that consumers can receive innovative mobile services at affordable prices, as well as with high-quality service.

The main goal of merger control in the European Union is to monitor the level of competition that is not weakened in order to fight for consumers, ” said Margaret Westadger.

CCS Insight analysts believe that this decision makes the fate of the operators Three and O2 in the UK uncertain because of the high level of competition. Subsequently, O2 may sell the unit in parts, which is unlikely to meet resistance from the European Commission, but in the end, such a decision is unlikely to help improve the situation on the market of the country's operators.

“The hostility of national regulators and authorities on competition issues, together with the negative representatives of the European Commission, initially created an unfavorable atmosphere for this merger. Even the numerous concessions on the part of CK Hutchison could hardly have any influence on the situation.

Despite the possibility of filing an appeal, O2 should pay more attention to potential competition with BT / EE in the local market in order to increase its attractiveness to customers, ”says Ovum analyst Matthew Hovet.

Representatives of CK Hutchison and O2 have not yet commented on the decision of the European Commission, but it is possible that representatives of the companies will try to appeal it in the near future.