British regulators okay $19bn Vodafone-Three mobile merger
Britain's Competition and Markets Authority has approved Vodafone and Three's £15 billion merger, on the condition that the companies invest billions of pounds in a joint 5G network rollout across the UK.According to CNBC, this decision allows the merger to proceed as long as significant infrastructure investment is made.
In addition to the 5G investment commitment, the merged Vodafone-Three entity will be required to cap specific mobile tariffs and provide fixed contractual terms to mobile virtual network operators that use other companies' networks.
Vodafone and CK Hutchison, the parent company of Three U.K., announced their merger last year. With the deal approved, the two companies will merge their U.K. businesses, giving Vodafone a 51% controlling stake and CK Hutchison a minority share.
"This mega-merger marks one of the most significant moments in the history of UK mobile, heralding the arrival of a new market leader with a combined 29 million customers," wrote Kester Mann, director of consumer and connectivity at CCS Insight, in a note on Thursday.
"The result, after months of intense regulatory scrutiny, is about as good as it could have been for Vodafone and Three. Not only did they get approval, but the agreed-upon remedies and commitments are less onerous than anticipated."
The CMA's decision comes after an antitrust investigation that began in January and culminated in an in-depth probe in April. Last month, the competition regulator outlined a path for the transaction to proceed, subject to the adoption of certain remedies.
The regulator was concerned that the merger, which reduced the number of major telecom network providers from four to three, would lead to higher prices or lower service quality.
Vodafone expects the transaction to be completed in the first half of 2025.
"Today's decision creates a new force in the UK's telecoms market and unlocks the investment needed to build the network infrastructure the country deserves," Vodafone CEO Margherita Della Valle said in a press statement.
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