Home Stock Market A $ 43.2 billion merger of Virgin Media and O2 was removed...

A $ 43.2 billion merger of Virgin Media and O2 was removed by the competition watchdog


The £ 31 billion ($ 43.2 billion) merger between Virgin Media and O2 was temporarily removed by the UK competition watchdog, after it found the deal was not likely to lead. to reduce competition or increase in wholesale mobile service prices.

Cable TV Corporation Liberty Global by US tycoon John Malone
LBTYA,
-0.08%

and Telefónica of Spain
TEF,
-1.09%
,
The respective owners of Virgin Media and O2, agreed to an agreement in May 2020 to incorporate their UK operations into a 50-50 joint venture.

The deal, bringing together O2’s 34 million mobile network customers with Virgin’s 5.3 million broadband, pay TV and mobile users, will create a national champion to challenge the operator. The country’s leading operator, BT Group.
BT.A,
-1.16%
.

Read: Liberty Global’s $ 100 billion deal that creates the Spree is starting to succeed. There is much more to come.

Competition and Market Authority (CMA) fast track An in-depth investigation of the deal in December to see if binding could lead to higher prices for consumers or reduced quality of service.

Companies like Sky, owned by Comcast
CMCSA,
+ 1.04%
,
uses mobile networks like O2 to run branded mobile services, while Vodafone
VOD,
-0.21%

rent a connection from Virgin Media to support its network.

Both Sky and Vodafone do make an objection for the deal.

However, on Wednesday, Martin Coleman, chairman of CMA’s investigative board on the merger, said that after a “thorough analysis”, the watchdog concluded that “the deal is is unlikely to lead to higher prices or reduced quality of mobile service – meaning customers will continue to benefit from the strong competition ”.

CMA says there is enough competition for wholesale deals from competitors, such as from BT and its Openreach subsidiary, as well as the smaller ones, to ask Virgin and O2 to continue supplying. fair deals.

Responding to CMA’s ruling in a joint statement, Liberty Global and Telefónica, said: “We continue to work actively with CMA to achieve a positive outcome and continue to be expected. closed around the middle of this year ”.

Last week, the two companies named the heads of Virgin Media Student Lutz as chief executive officer of the new venture, while Patricia Cobian, chief financial officer of O2, will take on the same position in the merged company.

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