The European Commission has given itself more time to decide whether or not to allow the proposed merger of Wind Italy and Three Italy to go ahead and extended the deadline for a decision by 15 working days from Aug. 18, 2016 to Sept. 8.
The EC did not provide any reasons for the delay, as is its usual practice. However, recent reports suggested that CK Hutchison stepped up its efforts to secure regulatory approval by offering a number of concessions on Jun. 6.
Citing unnamed sources, Bloomberg said Swisscom, Iliad and Digicel Group submitted bids to CK Hutchison and Wind parent VimpelCom for mobile frequencies and about 5,000 towers that would enable the creation of a new mobile player in Italy.
The sources said the bids have been presented to Margrethe Vestager, the European commissioner in charge of competition, in an effort to ease concerns that competition would be adversely affected through a merger of Wind and Three.
The Hong Kong-based company is rightly concerned that the deal may well not go ahead: the EC is now taking a harder stance on mergers that reduce the number of mobile operators within a member state of the European Union from four to three.
Indeed, the commission has already blocked CK Hutchison's proposal to buy O2 UK and merge it with Three UK in order to create a new mobile giant on the UK market.
The commission initially opened an in-depth investigation in March to assess whether the proposed joint venture between CK Hutchison and VimpelCom in Italy is in line with merger regulations.
In August last year, CK Hutchison Holdings and VimpelCom said they had agreed to form a 50:50 joint venture that would own and operate their respective mobile businesses in Italy, bringing together Three Italy and Wind Italy into a single entity. At the time, the companies hailed the transaction as the largest M&A deal in Italy since 2007, with a total value of €21.8 billion ($24.6 billion).
The transaction would bring together Three Italy and Wind to create a combined company with more than 31 million mobile and 2.8 million fixed-line subscribers in Europe's fourth-largest telecoms market, competing with Telecom Italia and Vodafone Italy.
For more:
- see the EC announcement
- see this Bloomberg article
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