Vodafone and Three UK’s $19 bn Merger Deal Faces CMA Probe

UK’s Competition and Markets Authority (CMA) officially launched a formal investigation on Friday into the proposed $19 billion merger between telecommunications giants Vodafone and CK Hutchison-owned Three UK.
Vodafone store UKUnder the regulatory framework, the CMA has allocated up to 40 working days to conduct a Phase 1 investigation, aiming to scrutinize the potential impacts of the merger and assess whether it could result in a ‘substantial lessening of competition.’ Should the initial investigation identify concerns, a more thorough Phase 2 investigation will be considered.

CMA Chief Executive Sarah Cardell highlighted the importance of this deal, stating, “This deal would bring together two of the major players in the U.K. telecommunications market, which is critical to millions of everyday customers, businesses, and the wider economy.” She emphasized that the CMA’s focus is to evaluate the potential effects of the merger on competition before determining the next course of action.

To gather diverse perspectives, the regulator has opened a window for public opinions until February 9 regarding how the merger might influence competition. The statutory deadline for completing this investigation is March 22.

“If the CMA finds the merger could lead to a substantial lessening of competition, then it can refer it for a more in-depth Phase 2 merger investigation. Phase 2 investigations typically last between 24 and 32 weeks and are led by an independent panel of experts,” explained the regulator.

The proposed merger between Vodafone and CK Hutchison, announced in June of the previous year, involves binding agreements with Vodafone holding a 51 percent stake and CK Hutchison owning 49 percent in the combined entity merging Vodafone UK and Three UK. The outcome of the CMA’s investigation will play a crucial role in determining the fate of this high-profile merger in the UK telecommunications sector.