Three’s takeover of O2 blocked by EU

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The planned £10.3bn sale of O2 to the owners of fellow mobile company Three has been blocked by the European Commission.

The deal was blocked by Margrethe Vestager, the European Commissioner for Competition, arguing that customers in the UK would face higher prices, and less choices, should the proposed sale to Hong Kong-based CK Hutchison take place.

In a statement, Vestager said: “We had strong concerns that consumers would have had less choice finding a mobile package that suits their needs and paid more than without the deal.”

“It would also have hampered innovation and the development of network infrastructure in the UK, which is a serious concern especially for fast moving markets,” she continued.

If the deal successfully went ahead, it would have resulted in just three major mobile network operators remaining in the UK: EE, Vodafone, and Three.

Currently O2 belongs to Telefonica in Spain, and Hutchison is considering a legal challenge to Vestager’s ruling. The company has said the deal would bring “major benefits to the UK not only by unlocking £10bn of private sector investment in the UK’s digital infrastructure, but also by addressing the country’s coverage issues, enhancing network capacity, speeds and price competition for consumers.”

Although Hutchison offered a number of concessions in its plans for the takeover, the ruling deemed that these offers – which included a five-year price freeze – “were not sufficient”.

Image courtesy of O2