Hutchison bids for takeover approval

Hutchison Whampoa is offering to help a smaller rival become Ireland’s fourth mobile operator in a bid to win EU approval for its acquisition of Telefonica’s O2 Ireland unit, according to sources.

Hutchison’s offer to the European Commission would cede spectrum and network access to a so-called mobile virtual network operator. The offer would enable the competitor to move from piggybacking on others’ services to running its own infrastructure within three years.

Concessions by billionaire Li Ka-Shing’s Hutchison are designed to overcome EU objections to the combination of two of the country’s four mobile operators that run their own networks.

Telefonica’s separate plan to merge its German unit with Royal KPN’s E-Plus is another tie-up that’s testing how far regulators are willing to allow consolidation in the telecommunications industry. Joaquin Almunia, the EU’s competition chief, has said such deals can’t come at the expense of higher prices for consumers.

“Three Ireland can confirm that they have submitted remedies and that these have been sent to interested parties for market testing,” Hutchison’s Three Ireland said. “We hope to reach final agreement with the commission and gain clearance of the acquisition as soon as possible.”

Hutchison will maintain an existing network-share agreement with Eircom allowing both companies to share buildings that host mobile masts and broadcasting equipment.

A new smaller competitor would share Hutchison’s network in urban areas and have a roaming pact to use its services in rural areas.

O2 Ireland and Vodafone’s Irish unit didn’t immediately respond to requests for comment.

— Bloomberg