Hutchsion Faces Regulator Hurdles in Bid to Buy O2 Ireland
Published on: 29th Jan 2014
By: Ian Mansfield
The European Union is expected to demand further concessions from Hutchsion Whampoa before it approves the company's purchase of Telefonica O2's Ireland subsidiary.
Hutchison already operates a mobile network in Ireland under its Three brand and is looking to merge it with O2 Ireland.
The European Union opened an investigation into the deal two months ago, and is expected to send a notice expressing concerns about the consolidation in the marketplace to the companies shortly.
The country currently has four mobile networks, and the merger of O2/Three would still leave the enlarged company in second place behind Vodafone. However, it would also create a significant imbalance in the market, with two companies holding nearly 40% market shares each, and small Meteor (owned by Eircom) holding less than 20 percent.
In effect, a duopoly in the market, which seems to have worried the European regulators.
The Commission had also previously expressed concerns that the transaction would reduce the merged entity's incentive to continue a network sharing agreement with Eircom, which could hamper Eircom's ability to compete effectively after the merger.
The EU is expected to announce its formal decision on the 24th March, depending on the response from Hutchision Whampoa.