BT Group Plc’s bid to acquire Deutsche Telekom AG and Orange SA’s British wireless venture EE Ltd for 12.5 billion pounds ($19 billion) faces an in-depth U.K. merger review.
The Competition and Markets Authority referred BT’s proposed acquisition of EE for a phase 2 investigation after the companies requested a fast-track reference, according to a statement posted Tuesday on its website. The CMA said that, based on the information it currently has, the merger may lead to a substantial lessening of competition.
The CMA said its competition concerns relate to the supply of wholesale access and call origination services to mobile virtual network operators and fiber mobile backhaul services to mobile network operators in the U.K.
If the transaction is completed, London-based BT will control the biggest high-speed broadband network as well as the largest wireless operator in the U.K., letting it sell packages of mobile, TV, home phone and Internet services. The deal is projected to be completed by March 2016.
The CMA said comments received after it opened its merger review on May 18 pointed to “significant competition concerns” in other markets such as the retail mobile market.
BT said it welcomed the CMA’s decision “as it should result in a shorter end-to-end review period.”
‘Positive’ for Customers
The proposed deal “will be positive for U.K. consumers and businesses as well as for competition, innovation and investment,” it said in an e-mailed statement.
The move has fueled talks among rivals as they look for ways to bulk up or add services to create their own bundles.
Telefonica SA reached a $15.3 billion deal in March to sell its 02 U.K. unit to Hong Kong-based Hutchison Whampoa Ltd., owner of the Three mobile brand.
Vodafone Group Plc and John Malone’s Liberty Global Plc are discussing a range of potential transactions, including combining their western European businesses, swapping some assets, or an outright merger, according to two people familiar with the matter.