The UK competition regulator has approved the £16.5 billion (€15.6 billion) merger of Vodafone’s domestic business with CK Hutchison’s Three UK, which is expected to create Britain’s largest mobile operator.
The Competition and Markets Authority on Thursday said the deal should be allowed to proceed if both companies sign binding commitments to invest billions to roll out a combined 5G network across the UK and agree to shorter-term customer protections.
The CMA last month paved the way for the tie-up after announcing the deal could proceed as long as the companies addressed competition concerns. The watchdog had warned in September that the merger could lead to higher bills for tens of millions of customers and demanded changes.
The tie-up, first announced in 2023, will reduce the number of operators in the UK from four to three. The new combined business will compete with BT and Virgin Media O2.
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The legally binding commitments require the delivery of the joint network upgrade over the next eight years. The companies must also cap the prices of some mobile tariffs and data plans, as well as offering preset prices and contract terms for wholesale services, for three years.
The use of such measures – known as behavioural remedies – rather than more drastic structural changes such as divestment of parts of the business is a rare step for the regulator.
Stuart McIntosh, chair of the inquiry group leading the investigation, said: “We believe the merger is likely to boost competition in the UK mobile sector and should be allowed to proceed – but only if Vodafone and Three agree to implement our proposed measures.”
UK communications regulator Ofcom and the CMA will oversee the implementation of the commitments made by the companies to address the competition authority’s concerns. The companies have pledged to invest £11 billion in the network.
When the deal was announced in June 2023, the companies said Vodafone would own 51 per cent of the combined business with the option to acquire CK Hutchison’s 49 per cent stake after three years if the merged group reached an enterprise value of £16.5 billion, which it is expected to take up. – Copyright The Financial Times
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