Connecting to LinkedIn...


Hutchinson bids for O2 takeover approval with sweetener deals

8/04/2016 by Stuart Wilson


Hutchison, the owner of mobile operator Three, has signed deals with Virgin and Sky that will guarantee space on its expanded mobile network if its £10.25 billion merger with O2 gets EU approval.

The Telegraph reports that the Hong Kong conglomerate has put £3 billion-worth of deals in place to show regulators that the merger will not result in less market competition.

The UK telecoms regulator, Ofcom, has raised concerns over what one less operator in the market will mean for consumers in terms of prices – a reservation shared by the EU's competition chief, Margrethe Vestager.

Vestager had suggested that a fourth mobile operator would need to be created for the deal to go through, but Hutchison did not strike a deal to sell assets that would create a new fourth operator to replace O2, according to Telegraph's sources.

However, Hutchinson hopes that capacity deals with Sky and Virgin Media will prove to the European competition watchdog that competition will be preserved.

Sky will take a 20% share of the network in a deal worth £2 billion if the takeover goes through, sources say. Virgin Media has agreed a 10% share of the network, they said. Both companies have previously gone on record as being in favour of the deal.

Hutchinson has also reassured regulators previously that it will not hike up bills for consumers for at least five years. In that time, it will make £5 billion of investment into the UK, it added.

Hutchison has also committed to selling O2's 50% stake in Tesco Mobile to the supermarket.

European officials now have until May 15 to decide whether to allow or block the O2 takeover.


mobile, Virgin, Sky, Network, Hong kong, UK

comments powered by Disqus

Latest Media

    Load More Media