Brexit could see Britain decide the fate of O2-Virgin merger

Brexit could see Britain decide the fate of O2-Virgin merger

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The EU will soon confirm if the proposed merger between O2 and Virgin will be assessed by its Competition Commissioner or Britain's Competition and Markets Authority.

The European Competition Commissioner Margrethe Vestager told Reuters on Monday that the role of Britain's Competition and Markets Authority is still being considered by the EU. It is likely the national body will assume responsibility for ruling on the proposed merger of the two mobile operators.

Vestager said this was due to Brexit concluding in the coming weeks and the direct impact of the merger on UK consumers. It’s an unusual approach for the bloc to take, but it isn’t unprecedented.

“We are not completely done yet, but obviously it impresses upon us that we are in the last months before Brexit is supposed to happen,” Vestager told Reuters.

“We will factor that in when we decide on the request for a referral and we will do that quite soon.”

The new player would directly complete with BT and the Commission’s preliminary review of the $38 billion deal ends on 19 November.

It was revealed in May that the two companies were in talks to merge.

Should the deal go ahead, they will form a new JV with each party owning a 50% share in the new entity.

In addition, sources claimed at the time that Liberty Global would have to make a payment to Telefónica to balance out the deal.

The combination of O2’s 34 million mobile customers and Virgin Media’s 5.3 million broadband, pay-TV and mobile subscribers won’t just create headaches for BT.

Additionally, the deal could create a new competitor to Comcast-owned Sky in the pay-TV market.

Speaking exclusively to Capacity in May, Paolo Pescatore, tech, media and telco analyst at PP Foresight, said: “This is an intriguing move. For sure, it is more likely to appease regulators than two mobile operators coming together.”


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