The UK’s Competition and Markets Authority (CMA) is likely to take a close look at a proposed merger between Vodafone and Three in the UK market.
Under the merger agreement, announced on Wednesday, Vodafone will own 51% of the merged business and CK Hutchison Holdings Limited, the owner of Three UK, will own 49%.
If approved, it would create the UK’s biggest mobile operator with 27 million customers — overtaking BT-owned EE and Virgin Media’s O2.
The two companies have said that following the merger they plan to invest £11bn over 10 years to create “one of Europe’s most advanced standalone 5G networks”.
However, regulators may be concerned that the merger would lead to weaker competition.
In 2016 the CMA expressed “serious concerns” about a proposed merger between Three and O2, and the European Commission later blocked the deal.
Pablo Pescatore, a telecoms analyst, told City A.M. that this decision set a precedent and the Vodafone/Three merger could be a “hard sale given that both companies have been outperforming the market for the last year or so”.
If the merger gets regulatory and shareholder approval, it is expected to be completed by the end of 2024.
