O2 and Virgin Media £31bn merger gets the green light from competitions watchdog

The UK’s competitions watchdog has today announced that it will provisionally allow a £31bn merger of telecommunications companies.

The merger, between O2 and Virgin Media (including Virgin Mobile), had been investigated by the CMA (Competitions and Markets Authority) due to concerns that the deal could lead to reduced competition in wholesale services.

Both companies offer wholesale services such as leased lines to mobile telecommunications companies, raising concerns that the merger could allow the companies to raise prices, but these have now been dismissed due to the presence of competitors such as BT Openreach.

The merger was first announced in May last year by Virgin Media owner Liberty Global and O2 owner Telefonica, but was halted in December as the CMA conducted its investigation.

The deal values O2 at £12.7bn and Virgin Media at £18.7bn, bringing the total value of the merger to £31.4bn.

Martin Coleman, CMA Panel inquiry chair, said: “Given the impact this deal could have in the UK, we needed to scrutinise this merger closely.

“A thorough analysis of the evidence gathered during our phase 2 investigation has shown that the deal is unlikely to lead to higher prices or a reduced quality of mobile services – meaning customers should continue to benefit from strong competition.”

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