CK Hutchison confirmed legal action against the European Commission over its decision to block the £10.25 billion deal to merge Hutch’s 3 UK operations with Telefonica’s O2, but refused to shed light on why it has waited almost three months to mount the challenge.
The company told Mobile World Live in an emailed statement it has lodged an appeal to the European General Court against the decision, first announced in May, to block the acquisition, which would have created the market’s leading player.
The company however did not provide comment on why it has taken so long to take the issue to court, or if they hoped to now reopen negotiations with O2.
The European Commission said at the time it had blocked the deal on competition grounds, as it would have shrunk the market from four to three players, among other factors.
Sources at the UK’s Daily Telegraph also suggest that the UK’s EU referendum “played a major role” in the decision to block the deal, with the commission not wishing to go against UK regulators Ofcom and CMA in the run up to the vote, which were also against the deal.
The European Commission is yet to respond to Mobile World Live’s request for comment.
Even if CK Hutchison is successful in court, reviving the tie-up between 3 UK and O2 appears unlikely, with Telefonica now working on floating a minority stake of the company.
CK Hutchison could however seek compensation from the EC, with its UK plans now up in the air, as it struggles to compete with market leaders BT, which now owns EE, and Vodafone.
The company may also seek to send a message by mounting the challenge, as it is currently in the midst of merging its assets in Italy with VimpelCom’s Wind, a deal which is also going through EU regulatory approval.
Since the deal in the UK was blocked, senior executives at 3 UK have lobbied for assistance from UK regulator Ofcom in the country’s upcoming spectrum auction, arguing that restrictions should be placed on BT’s EE given its dominance in the market.