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Verdict to pave way for M&A activity in Europe

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Juliana Kokott, the advocate general at the EU Court of Justice will today deliver her verdict on whether the correct decision was made to block the proposed merger of O2 and Three UK in 2016.

The decision could trigger a wave of M&A activity across the industry, according to a Financial Times report.

In 2016, the proposed £10.3 billion merger of O2 and Three UK was blocked by the European Commission (EC) but it was barred from going ahead due to limited choices for UK customers.

However, since then, Three UK’s owner CK Hutchison brought an action of annulment to the General Court which concluded that the EC was incorrect in its ruling since it had made errors to how it applied the law in its assessment.

O2 has since merged with Virgin Media in a £31.4 billion deal.

The ruling could be monitored by Orange and MasMovil in Spain, who are in talks to combine their Spanish operations.

The proposed €19.6 billion venture is likely to be the first in a flurry of activity as the industry continues to streamline.

At the heart of the debate is the idea that reducing the number of operators in a domestic market from four to three would harm competition and limit choices for consumers.

A final judgement by the ECJ is expected next year.