In a country that has long been in financial turmoil in the eyes of the EU, two companies in the telecommunications industry looked to create a merger that would unseat Italy’s current leader in mobile provisions. CK Hutchison Holdings Ltd. and VimpelCom Ltd. now face an in-depth European Union probe into their plans to combine their Italian telecommunications units after the EU’s antitrust watchdog raised concerns the deal could lead to higher prices and less choice for mobile users.
Italy is not the only market in which Hutchison has received some static regarding merging of their holdings – analysis of the merger comes on top of the regulator’s ongoing review of Hutchison’s plans to combine its Three unit in the U.K. with Telefonica SA’s O2. We are witnessing a very omnipresent EU, but concern with issues of anti-trust deflects attention from the greater issue of the struggles of the Euro. There may be some concern that the EU is focusing on this issue among the many facing the governing body; however, cooperation has been paramount throughout the first stages of the process.
The focus of the analysis is “the extent to which the parties are close competitors, the market incentives that would be faced by the joint venture and the potential response of its competitors,” as opposed to the effect on the greater Italian economy. They have set the tentative date of August 10 to make a decision, so until that time keep an eye on who you are getting phone service through!