Britain to review $38 bn deal between Virgin Media and O2

Competition and Markets Authority, the British competition regulator, has asked to review the $38 billion merger deal between Liberty Global’s Virgin Media and Telefonica’s O2 in the UK.
Virgin Media and O2
The proposed merger Virgin Media and O2 is expected to pose much stronger competition to market leader BT. The deal will bring together the biggest cable TV provider in Liberty’s Virgin Media with Telefonica’s O2, the second-largest mobile operator.

The Telefonica deal will allow the debt-laden Spanish telecom group to extract cash while remaining in Britain, having tried and failed to sell O2 in 2016.

The deal will force main rivals including Vodafone Group, Comcast’s Sky, Three UK and TalkTalk to examine whether they need to have the full set of fixed and mobile assets to keep up, Reuters reported in May.

“Ultimately, this is a decision for the European Commission, but as the merger will only impact UK consumers – and any effects would only be felt after the end of the transition period – it is only right for the CMA to request it back,” said Andrea Coscelli, head of the Competition and Markets Authority.

A spokesman for Telefonica and Liberty Global said the companies had formally requested the European Commission to approve the merger of Virgin Media and O2 last week, while keeping the CMA and regulator Ofcom fully informed and engaged.

“We have made a compelling case to enable the European Commission to clear the transaction as soon as possible,” he said.

“Transferring the case to the CMA will delay this process and our ability to press on with improving the UK’s broadband and 5G infrastructure, whilst creating new jobs in the UK.”

He said the companies believed the deal would bring substantial benefits to UK consumers and should be swiftly approved.