CK Hutchison is set to win EU approval for its 2.45 billion euro ($2.8 billion) deal to buy out Veon from an Italian joint venture after reaffirming a pledge to help rival Iliad’s business in Italy, a person familiar with the matter said.
The telecoms industry has in recent years sought to consolidate in Europe to boost revenue and investments in 5G and broadband, but has struggled to convince regulators worried about possible price hikes by a smaller number of larger firms.
The tough regulatory approach has meant companies often have to offer significant concessions to get their deals approved.
Hutchison and Amsterdam-based Veon, formerly known as VimpelCom, won the European Commission’s approval for their Wind Tre joint venture two years ago after agreeing to sell radio frequencies, and transfer or share mobile base station sites to help French maverick Iliad .
The aim was to ensure a fourth telecoms operator in Italy to compete with Telecom Italia Mobile, Vodafone and the merged entity.
Hutchison said in July it would buy full control of the Italian venture as Veon, whose biggest shareholder is Mikhail Fridman’s investment vehicle LetterOne, looked to cut its debt and focus on emerging markets.
Hutchison, owned by billionaire Li Ka-shing, offered concessions on Aug. 8 to try to soothe regulatory worries.
“They are the same as those in 2016,” the person familiar with the matter said.
European Commission spokesman Ricardo Cardoso and Veon declined to comment. Hutchison could not immediately be reached for comment.
The EU competition enforcer has set an Aug. 31 deadline for its decision.
Source: Reuters.com