Regulators in the United Kingdom on Wednesday issued a provisional approval for the pending $19.1 billion (12.5 billion British pounds) merger between fixed service company BT Group plc and wireless operator EE.
“We recognize that this is a merger which is important to many consumers and businesses. We have heard a number of concerns from competitors,” Competition and Markets Authority (CMA) inquiry chair John Wotton said. “Having considered all the evidence, the group does not provisionally believe that, in a dynamic and evolving sector, it is more likely than not that BT/EE will be able to use its position to damage competition or the interests of consumers.”
According to the CMA, the tentative go ahead was given based on research that suggested the merger will not “result in a substantial lessening of competition (SLC) in any market in the UK.” In coming to a decision, the CMA said it investigated the deal’s potential impact on several different markets, including retail mobile, wholesale mobile, mobile backhaul, wholesale broadband and retail fixed broadband services.
The deal, which was announced in February, has drawn strong interest from concerned competitors. The CMA said it received 20 submissions from third parties stating their view on the merger, and held 10 hearings with third parties during its investigation. The U.K. regulator said the feedback was key in considering ten potential theories of harm that might be caused by the merger.
The CMA unanimously found no evidence of harm in nine out of the ten categories, but was divided evenly over the potential of lessened competition in the wholesale mobile market. Since a finding of harm requires a two-thirds majority, however, a negative ruling could not be reached.
BT chief executive Gavin Patterson welcomed the news Wednesday.
“We’re pleased that the CMA has provisionally approved BT’s acquisition of EE,” Patterson said. “The combined BT and EE will be good for the UK, providing investment and ensuring consumers and businesses can benefit from further innovation in a highly competitive market”.
The CMA said its preliminary findings will be bolstered by a final report to be given by January 18, 2016. Responses to the decision must be submitted to the regulatory body by November 19.
Filed Under: Industry regulations