EU blocks Hutchison's bid for Telefonica's O2

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The European Commission has blocked the owner of mobile network Three's £10.3 billion plan to take over O2 in the UK.

CK Hutchison owned Three deal with Telefonica’s O2 would have created the UK’s largest mobile group and reduce the number of big players in the market from four to three.

Margrethe Vestager, European Commissionser, said she had “strong concerns” about the merger.

“We had strong concerns that consumers would have had less choice finding a mobile package that suits their needs and paid more than without the deal,” Vestager said.

“It would also have hampered innovation and the development of network infrastructure in the UK, which is a serious concern especially for fast moving markets. The remedies offered by Hutchison were not sufficient to prevent this,” she added.

The European Commissioner argued that the sale of O2 to Hutchison would have led to higher prices and reduce choice and quality for consumers.

Hong Kong based Hutchison said they were considering to legally challenge the decision.

“Major benefits to the UK not only by unlocking £10bn 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,“ CK Hutchison said.

The company, controlled by Asia's richest man Li Ka-shing, had aimed to expand its telecoms footprint in Britain, where it already operates as ”Three“.

European competition regulators opened a full inquiry into the deal in October. They had until May 19 to reach a decision.