The UK will comprehensively evaluate the merger between Vodafone and Three

(Reuters) – The proposed merger between Vodafone, which operates in the United Kingdom, and Hutchison, which operates in the United Kingdom, may be the subject of an in-depth investigation for 24 weeks, after the British competition regulator said on Friday that the union could harm consumers.

The $19 billion deal was announced last year and, if implemented, would reduce the number of mobile networks in the UK from four to three. Therefore, it is expected that it will require in-depth research, because in principle at least four networks are needed to keep prices low.

On Friday, the Competition and Markets Authority gave the two companies five working days to respond with “meaningful solutions” to its concerns that the merger would lead to higher prices for consumers and businesses and lower investment.

Given the complexity of the process, which does not allow for clear divestments to resolve competition concerns, it seems likely that the process will move to the second stage of the CMA investigation, according to lawyer Tom Smith, of Geradin Partners.

“It's not really a reasonable outcome,” Smith said of the possibility of resolving the CMA's concerns within five days.

The 24-week in-depth study can be extended for an additional eight weeks in certain circumstances.

The Authority stated in its statement that competitive pressure is necessary to keep prices low and stimulate investment.

“While Vodafone and 3 have made a number of claims about how their deal will benefit competition and investment, the CMA has not yet seen sufficient evidence to support these claims,” regulator Julie Bone said in a statement. 1 Decision making.

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“This requires an in-depth investigation unless Vodafone and 3 can provide solutions.”

As part of the deal, the two companies committed to spending £11 billion ($13.87 billion) on 5G networks, in line with the government's stated goal of improving British communications.

The companies said the deal will benefit consumers as the new technology will be implemented more quickly.

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