The proposed merger between CK Hutchison’s 3 Italia unit and VimpelCom’s Italian subsidiary Wind Telecomunicazioni will reportedly face objections from the European Commission’s (EC’s) competition watchdog. Bloomberg writes that the EC is preparing to send a statement of objections which catalogues antitrust concerns over the EUR21.8 billion (USD24.7 billion) deal. Unnamed sources cited by Bloomberg say the EC will issue its report in June, highlighting its fears that the proposed 50:50 venture could result in higher prices and less choice for Italian consumers, as well as less negotiating power for the country’s MVNOs, with the market going from four to three players.
The competition authority is scheduled to release its final decision on the tie-up by 18 August. Neither Hutchison nor VimpelCom have hinted what, if any, concessions would be made should the EC object to the deal. The two companies have previously defended their proposed merger, however, issuing a joint statement last month to say: ’The combined business will have the scale, financial strength and a more efficient cost structure to offer Italian consumers and businesses a state-of-the-art network.’ The two firms say they are cooperating with the EC’s investigation.