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Friday, January 15, 2016

BT and EE merger is cleared by UK competition authority

The UK’s Competition and Markets Authority (CMA) has cleared the potential £12.5 billion sale of EE to BT. A provisional decision was announced in October last year.

It means that the BT/EE merger is now likely to be completed on 29th January.

According to the CMA, the sale of EE (by Orange and Deutsche Telekom) and its acquisition by BT is not expected to result in a substantial lessening of mobile, broadband or backhaul competition in the UK.

John Wotton, who chaired the CMA’s inquiry, said “The retail mobile services market in the UK is competitive, with 4 main mobile providers and a substantial number of smaller operators. As BT is a smaller operator in mobile, it is unlikely that the merger will have a significant effect. Similarly, EE is only a minor player in retail broadband, so again it is unlikely that the merger will have a significant effect in this market. We have also found that in supplying services such as backhaul, wholesale mobile or wholesale broadband services a combined BT/EE would not have both the ability and the incentive to disadvantage competitors such that there would be significant harm to competition.”

Gavin Patterson, BT’s Chief Executive, said “It is great news that the CMA has approved our acquisition of EE. We are pleased they have found there to be no significant lessening of competition following an in-depth investigation lasting more than ten months. The combined BT and EE will be a digital champion for the UK, providing high levels of investment and driving innovation in a highly competitive market. I have no doubt that consumers, businesses and communities will benefit as we combine the power of fibre broadband with the convenience of leading edge mobile services. I look forward to welcoming EE into the BT family”.

Marc Allera, EE’s Chief Commercial Officer, will become EE CEO when the deal is completed, replacing current CEO Olaf Swantee.

[CMA summary (pdf)]

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Author: The Fonecast
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