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Vodafone and Three mega telecoms merger investigated

Vodafone and Three mega telecoms merger investigated
Paloma Kubiak
Written By:
Paloma Kubiak

The mega merger between Vodafone and Three is now under formal investigation by the competition watchdog to examine the impact it could have on customers and businesses.

The Competition and Markets Authority (CMA) has launched a formal investigation into the proposed merger which would see Vodafone have a 51% share while CK Hutchison (Three) would hold the remaining 49%. No cash consideration was to be paid.

Details of the binding agreement to merge the UK businesses came to light in June 2023, with the deal expected to complete before the end of 2024, subject to regulatory and shareholder approvals.

The CMA has now started its ‘phase one’ investigation after receiving the required information from both Vodafone and Three.

It now has up to 40 working days (deadline of 22 March 2024) to assess the deal as to whether it may lead to a “substantial lessening of competition”. If so, the probe will progress to a more in-depth ‘phase two’ investigation which lasts between 24 and 32 weeks and is led by an independent panel of experts.

Sarah Cardell, chief executive of the CMA, said: “This deal would bring together two of the major players in the UK telecommunications market, which is critical to millions of everyday customers, businesses and the wider economy. The CMA will assess how this tie-up between rival networks could impact competition before deciding next steps.”

The CMA added that it can’t look at other potential effects of a merger, such as access to personal data, while national security concerns are a matter for the UK Government.

Interested parties are invited to submit views on the merger by 9 February 2024.

Currently, there are four mobile network operators in the UK: Vodafone UK, Three UK, BT/EE and Virgin Media O2.

In 2021, the CMA gave the go ahead for a merger between Virgin Media and Virgin Mobile with the O2. It followed on from the formation of telecom giants BT and EE in 2015.