Green light for the merger between O2, the British subsidiary of Telefónica, and Virgin Media, owned by the American Liberty Global. The UK Competition and Markets Authority (CMA) has finally given the green light to the merger, an operation valued at 35,800 million and that will create a telecommunications giant in the country with 46 million lines, between mobile, fixed broadband and television. After months of investigation, the regulator considers that they meet all the conditions in accordance with the original terms.
“After carefully analyzing the agreement, we are confident that competition between mobile communication providers will remain strong and therefore it is unlikely that the merger will lead to higher prices or lower quality services,” he stressed in the note Martin Coleman, chairman of the CMA panel.
The CMA provisionally authorized the transaction in April, without requiring any resources, after prior referral from the European Commission. However the
British regulator was initially concerned about whether the merger it entailed a subsequent rise in prices or a reduction in the quality of the wholesale services offered to other operators, which would ultimately lead to worse treatment for UK consumers. The CMA had made it clear early on that it was not concerned with the overlap of retail services, based on Virgin Mobile’s small size, so it focused its analysis on finding out whether the merger could reduce competition in the wholesale services arena. .
“O2 and Virgin are major service providers for other companies serving millions of consumers. It was important to make sure that this merger would not leave these people worse off, ”Coleman added.
Both telemarketers now hope that the transaction closes on June 1, 2021. The merger agreement was agreed last May between Telefónica and Liberty Global with the aim of integrating both companies through a joint venture owned 50% by both companies. The operation will allow the company led by José María-Álvarez Pallete to be more competitive in the British market and, at the same time, alleviate its debt.
Last month the appointment of Lutz Schüler as CEO and Patricia Cobian as CFO of the resulting company following the transaction was announced. Schüler is currently CEO of Virgin Media and Cobian serves as CFO of O2.
‘This is a watershed moment in the history of UK telecommunications as we are now empowered to present a real alternative where it has not existed before, while investing in fiber and 5G, something the UK needs to prosper. We thank the CMA for conducting a thorough and efficient review. Lutz and Patricia are ready to take the reins and launch a national connectivity champion that will unite more people, drive more companies to grow again and stimulate more communities for the common good, “said José María Álvarez-Pallete, president of Telefónica and Mike Fries, CEO of Liberty Global, in a joint statement.