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Curr946
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The EU sees the deal as having less impact than others that were agreed.

 

"European Union regulators predict that a multi-billion pound agreement to create the U.K.’s biggest mobile-phone business would have a much lower impact on customer prices than previous deals that won the EU’s seal of approval, according to a lawyer for CK Hutchison Holdings Ltd.

EU merger watchdogs predict that merging Hutchison’s Three with Telefonica SA’s O2 in the U.K. would raise prices by as much as 6.7 percent, said Thomas Wessely, a lawyer for Freshfields Bruckhaus Deringer LLP in Brussels who represents Hutchison in the deal.

While that’s above a 5 percent threshold the EU often views as problematic, it’s well below EU forecasts for earlier phone deals in Germany and Ireland, he said.

Billionaire Li Ka-Shing’s Hutchison has made his assault on the British phone market a top priority. Amid growing concerns over the tie up, Canning Fok, Li’s top lieutenant, vowed last month not to raise prices for five years if the deal goes through. He also said the combined company would invest 5 billion pounds to strengthen network coverage, reliability and data speeds.
Increasingly Wary

Three is negotiating a package of concessions with EU regulators increasingly wary of mergers in the phone industry. TeliaSonera AB and Telenor ASA’s attempt to merge their Danish units collapsed in the face of EU opposition last year.

The EU’s so-called upward pricing pressure models showed far higher potential increases in previous deals that were cleared with concessions, Wessely said. It foresaw a 15.6 percent increase for a merger between Telefonica’s German unit and E-Plus and predicted a price increase of 11.2 percent for Hutchison’s bid for O2 in Ireland.

The company is arguing that Three and O2 aren’t each other’s closest competitors, which would be a red flag for regulators checking for possible price increases, Wessely told an event in Brussels. Customers are more likely to switch to BT Group Plc’s EE or Vodafone Group Plc, he said.

The European Commission didn’t immediately respond to a request for comment on its analysis of the deal. The regulator has a May 19 deadline to rule on the combination."

 

Taken from: http://www.bloomberg.com/news/articles/2016-03-11/eu-sees-three-o2-price-impact-less-than-other-deal...

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