Britain’s Competition and Markets Authority (CMA) allowed the merger deal between Virgin Media and O2. The regulator made this decision after it found that this merger will not impact market competition. The merger deal is worth £31.4 billion.
According to a CNBC report, the CMA had earlier expressed concern that the tie-up may lead to rise in prices or even hurt the quality of the services it provides. The regulator was of the view that the merger would hurt the consumers.
While clearing the deal, the watchdog said there was sufficient competition in the leased-line market from players like BT Openreach.
“O2 and Virgin are important suppliers of services to other companies who serve millions of consumers. It was important to make sure that this merger would not leave these people worse off. That’s why we conducted an in-depth investigation,” said Martin Coleman, CMA panel inquiry chair.
“After looking closely at the deal, we are reassured that competition amongst mobile communications providers will remain strong and it is therefore unlikely that the merger would lead to higher prices or lower quality services,” Coleman added.
The merger was referred to a group of independent CMA Panel members for an in-depth Phase 2 investigation.
The deal between Liberty Global’s Virgin and Telefonica’s O2 will lead to the creation of a new giant in the UK’s telecom industry.
The new group will have a total of 46 million video, broadband and mobile subscribers and £11 billion in revenues, the companies said in May last year when they announced the transaction.
“This is a watershed moment in the history of telecommunications in the UK as we are now cleared to bring real choice where it hasn’t existed before, while investing in fibre and 5G that the U.K. needs to thrive,” Liberty Global CEO Mike Fries and Telefonica chief José Maria Alvarez-Pallete said in a joint statement Thursday. “We thank the CMA for conducting a thorough and efficient review.”