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Hutchison wins legal challenge to EU veto on O2 takeover
[BRUSSELS] CK Hutchison Holdings has won a victory against a European Union (EU) antitrust decision blocking its £10.3 billion (S$17.97 billion) bid to buy O2 UK from Spain's Telefonica in 2016.
Thursday's ruling by the Luxembourg-based General Court marks a rare setback for the European Commission's competition watchdog, but will cheer a telecoms industry seeking a looser rein on mergers aimed at sharing heavy 5G investments.
Hutchison welcomed the court ruling, criticising regulators for a "misconceived default view" on four-to-three telecoms mergers, which it said had put a brake on consolidation in the sector.
Retired billionaire Li Ka-shing's Hutchison conglomerate had aimed to become Britain's biggest mobile telecoms network operator by combining its Three UK with O2 to compete against BT's EE and Vodafone.
The 2016 deal, however, raised red flags with EU competition enforcers, wary of telecoms mergers that reduce the number of players from four to three and could push up prices. Hutchison subsequently appealed the EU veto.
The General Court annulled the EU ruling, saying the watchdog had failed to prove that the merged company would harm competition or raise prices.
Judges also said the commission had confused several concepts and "considerably widened the scope of the rules on concentrations of undertakings and distorted the concept of important competitive force".
The commission said it would analyse the judgement before deciding whether to appeal at Europe's highest court, the EU Court of Justice.
The judgement marks a resounding victory for Hutchison and the entire European mobile telecoms industry and possibly the most important over the last 15 years over mergers, said Douglas Lahnborg, an antitrust partner at law firm Orrick.
"This raises the bar for the commission to prohibit four-to-three transactions, not only in the mobile industry but also other sectors," he said.