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No more Hutchison concessions for O2 move

Three

Hutchison won’t be making any further concessions to the EU in a bid to push through its proposed acquisition of O2 UK, according to reports.

Reuters has claimed sources close to the deal believe the Hong Kong-based operator has reached the end of its tether after making two sets of concessions to Europe in a bid to push the £10.3bn buy through. The first set included price freezes and a sell off of network capacity; the second offered up more capacity and the liberation of the Tesco Mobile MVNO brand, currently half-owned by O2.

Ofcom and The Competition Authority both aired their concerns with the European Commission, and competition commission Margrethe Vestager appears unlikely to sanction a deal which would see the number of UK market mobile network players reduce from four to three.

According to sources at Reuters, Hutchison will push through the courts to get the deal approved in the case Europe opposes the deal.

With such entrenched stances, it is hard to imagine a deal still being on the table. As such, the question of what will happen to O2 UK is raised. Bloomberg has reported that Telefónica is still very keen to exit the UK market to alleviate debt, and will carefully assess its options as other parties look likely to figure out a move for the country’s second largest operator.

Liberty Global has been linked with a potential move for the telco, and it has been speculated that a UK move has been in the offing after it created a new JV with Vodafone in Holland earlier this year. Other potentially interested parties may include Altice and Vivendi, each of whom have been particularly active in the M&A space in recent years, especially with the UK being a mature, sizeable and generally high value market.

Other potential players could include Orange and DT, both of whom moved out of the UK market following the sale of EE to BT. Venture Capital firms are also alleged to be weighing up a move.


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