EU Rejects U.K. Bid to Take Over Hutchison-02 Deal Probeby
European Commission says it's better placed to investigate
Hutchison-02 deal would create U.K.'s biggest mobile operator
The European Commission said it’s best placed to probe CK Hutchison Holdings Ltd.’s proposed acquisition of Telefonica SA’s 02 unit in the U.K., rejecting a request to investigate the deal from Britain’s antitrust regulator.
The Commission said in an e-mailed statement Friday that it can ensure consistency in the application of merger rules, given its “extensive” experience in the sector. 02 and Hutchison declined to comment on the ruling.
Li Ka-shing’s Hutchison agreed to acquire the O2 unit in March, in a deal that would create Britain’s biggest wireless provider by customers. The U.K.’s Competition and Markets Authority in October asked to take over the probe saying the tie-up would be most felt in the U.K. and that it would avoid duplication as it was already looking into a separate deal in the same industry between BT Group Plc and EE Ltd.
The European Commission generally rejects such requests, as it develops ground rules for mobile-phone competition. EU regulators spurned a similar U.K. bid for jurisdiction over the deal that created EE five years ago.
Shares of Telefonica declined 1.7 percent to 11.07 euros at 3:53 p.m. in Madrid. CK Hutchison added 0.4 percent to close at HK$103.70 in Hong Kong.
In its statement on Friday, the commission said it will continue to cooperate closely with the U.K. authority. It has until April 18 to take a final decision to clear or block the telecommunications deal.
Following the EU ruling, the CMA said it intends “to make representations on the competition impact of the merger in the U.K. as well as on potential remedy proposals made by the parties.”