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Business

Brussels shoots down O2-Hutchison merger

The European Commission has thwarted plans of a blockbuster merger between O2 and Hutchison in the UK. It said it had strong concerns the tie-up would harm British customers and make them pay more for services.

The EU executive on Wednesday blocked the

planned takeover

of Telefonica's O2 mobile operator by Hong Kong group CK Hutchison Holdings, which had hoped to merge O2 with its Three services in Britain.

"The Commission has blocked the proposed acquisition under the EU Merger Regulation", the bloc's trust regulator said in a statement.

It added it had strong concerns that UK mobile customers would be left with less choice and would have to pay higher prices as a result of the takeover, which had been valued at roughly 10.5 billion pounds ($15.1 billion, 13.3 billion euros).

Insufficient promises

The Commission also said the deal might have harmed innovation in the mobile sector, leaving only Vodafone and BT's Everything Everywhere to challenge the merged entity.

"The deal would have hampered the development of network infrastructure in the UK," Competition Commissioner Margrethe Vestager said in a statement.

Hutchison had made a series of promises on prices, investment and competition for the time after the takeover, but Brussels thought the pledges the company had made were not sufficient.

hg/cjc (dpa, AFP)

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