Europe ‘likely’ to permit Wind/Three deal tomorrow
Industry sources say European Commissioner will give approval to Italian merger of VimpelCom and Hutchison units on September 1
The European Commission is expected to give approval tomorrow, Thursday, to VimpelCom’s €21 billion merger of its Italian operation, Wind, with CK Hutchison’s Three.
Sources close to the negotiations say they expect EU commissioner Margrethe Vestager to announce her decision at 12:00 Brussels time on September 1. One person expressed “95% confidence” that Vestager’s will allow the merger.
The move will reduce the number of mobile operators in Italy from four to three – with a combined Wind/Three being larger than either Telecom Italia’s TIM or Vodafone – but that will be temporary. As a concession to the Commission Wind and Three have agreed to sell spectrum and towers across Italy to Iliad, the group that runs Free Mobile in France.
If the prediction is true that Vestager has approved the merger, her decision will be met with dismay in the UK and her native Denmark. Earlier this year she blocked CK Hutchison from buying Telefónica’s O2 UK for £12 billion and merging it with its own Three UK – replicating a smaller deal that the two companies did in Ireland two years before.
And a year ago, in September 2015, Telia and Telenor abandoned plans to merge their Danish operators because they found the Commission’s terms unacceptable.
The Italian regulator says that Wind/Three will have a 33.7% market share, slightly more than TIM’s 32.4%, and well above Vodafone’s 26.4% – but that is before Iliad outlines its strategy.