UK Watchdog Offers Conditional Approval for Vodafone-Three Merger Amidst Competition Concerns, Paving Way for UK’s Largest Carrier

The UK regulator has indicated a possible way forward for the merger between Vodafone and Three despite worries over competition. The proposed $19.7 billion acquisition of the network owned by Li Ka-shing's CK Hutchison Holdings by Vodafone would result in the largest carrier in the UK.

The UK has questioned the assertion by Vodafone Group and Three that their prospective £15 billion (US$19.7 billion) merger would enhance the nation's mobile networks, noting that the agreement could lead to significant competition issues. Nevertheless, the regulator has not entirely dismissed the possibility of the deal being finalized.

The Competition and Markets Authority announced last Friday that they discovered problems with the merger, particularly related to increasing prices and deteriorating customer service. Nonetheless, they acknowledged that the merger could potentially enhance the performance of the mobile networks.

The verdict from the CMA essentially approves the merger, according to Karen Egan from Enders Analysis. The damage from pricing is "minor", and the suggested solutions are simple for the firms to implement.

The CMA is now requesting Vodafone to propose solutions to resolve issues in order to approve the deal before its final verdict on December 7th. Vodafone's shares saw minimal fluctuation in the morning trade in London.