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European Commission blocks Three's £10.5 billion O2 takeover

The European Commission has blocked Three's £10.5 billion takeover of Telefonica's O2, despite Three's owner CK Hutchison attempting to butter up the EU by adding a number of perks.

The deal was initially announced just over a year ago and would have made Three the UK's largest mobile operator, with just Vodafone and EE providing the competition.

Margrethe Vestager, Europe's competition commissioner, expressed concerns that the deal would negatively affect UK consumers, publishing a tweet saying: "Commission has decided to block Hutchison's plan to take over O2 in the UK. Why? To serve UK consumers - affordable prices and innovation."

She also said: "The goal of EU merger control is to ensure that tie-ups do not weaken competition at the expense of consumers and businesses. We want the mobile telecoms sector to be competitive, so that consumers can enjoy innovative mobile services at fair prices and high network quality."

Hong-Kong based CK Hutchison issued a statement saying that it was "deeply disappointed by the Commission’s Decision to prohibit the merger" and suggested "the possibility of a legal challenge."

The statement continued: "We strongly believe that the merger would have brought major benefits to the UK, not only by unlocking £10 billion 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 and businesses across the country."

Eli Katz, the Chair of the Internet Telephony Services Providers’ Association, commented: “ITSPA is pleased that the European Commission has blocked the O2/Three deal. We believe that, if the deal had gone ahead, it would have resulted in price rises, negatively impacting the consumers in the UK.

"ITSPA feels that a competitive landscape in the UK telecommunications market is vital to provide the best outcomes for consumers and businesses. A reduction from four to three mobile network operators would have threatened this.”

Image source: Shutterstock/Archiwiz