• Concessions are likely to avert EU statement of objections
  • Carriers agree to let Iliad enter Italian wireless market

CK Hutchison Holdings Ltd. and VimpelCom Ltd. have submitted a new package of concessions to the European Union as they seek approval from regulators to create Italy’s largest wireless provider.

The companies agreed to sell spectrum, wireless sites and services including national roaming to Iliad SA to let Xavier Niel’s carrier enter the Italian phone market, they said in an e-mailed statement Wednesday. The agreement with Iliad is also subject to EU approval, they said.

The latest remedies are likely to forestall a formal statement of objections to the merger from EU regulators, who in May vetoed Hutchison’s bid for U.K. carrier O2. An expansion in Italy would mark a significant development for low-cost carrier Iliad, known for wireless packages starting at 2 euros a month, and establish the company as a fourth mobile network operator in the country.

“Vimpelcom and CK Hutchison remain confident of securing regulatory approval from the European Commission and will continue to work closely and constructively with all relevant authorities,” they said.

Regulators have taken a tougher stance on consolidation between mobile-phone carriers in the last two years, showing skepticism that such deals will boost investment without raising prices for customers. EU opposition helped scupper a Danish deal last year.

The combination of Wind and 3 Italia, valued at more than $20 billion and to be led by Wind Chief Executive Officer Maximo Ibarra, would allow the two carriers to share expenses as competition weighs on call and data prices. The enlarged company would unseat Telecom Italia SpA as the country’s largest wireless provider by customers.

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