UK CMA to fast-track review into GBP2 billion Netomnia deal
The UK competition watchdog has said it will fast-track a review into a potential in-depth investigation into Nexfibre's proposed £2 billion takeover of rival Substantial Group.
Nexfibre, a joint venture including Liberty Global, Telefonica SA and private equity firm InfraVia, struck the deal to buy the alternative fibre firm, which runs the Netomnia brand, in February.
The combined group is expected to have more than 3.4 million fibre premises and over 500,000 customers by the completion of the deal.
On announcing the deal, the groups said it will strengthen their position competing against BT Group PLC's Openreach, the UK's biggest fibre broadband firm and network operator.
However, it drew concerns from competitors over potential competition issues.
On Wednesday, the Competition & Markets Authority confirmed it is accelerating its process to assess a potential in-depth phase two investigation into the deal.
It came after Nexfibre requested a fast-tracked process last month.
The CMA said it will confirm whether it will pursue the more thorough investigation by August 26.
Rajiv Datta, chief executive of Nexfibre, said: "We requested a fast-track to phase two to get to the right answer faster; ensuring due process, while recognising urgency.
"We look forward to continuing our constructive engagement with the CMA. This deal would create the scaled, sustainable alternative to the BT Openreach monopoly, something the UK market still lacks.
"Every day of delay reinforces the incumbent's advantage and slows the progress of genuine competition."
However, alternative fibre competitors have claimed they believe the takeover deal will impact customers.
Simon Holden, chief executive of CityFibre said: "Virgin Media O2/Nexfibre's planned acquisition of Netomnia would remove a successful challenger and reduce choice for consumers.
"With 80% overlap between the two networks, the deal raises significant questions and the CMA is right to take an in-depth look at its impact on UK digital infrastructure and the competition that policymakers, regulators and the altnets [alternative networks] are working so hard to establish."
Telefonica shares were 0.1% higher at EUR3.52 each on Wednesday morning in Madrid, while BT class A shares were down 1.1% at 188.00 pence in London.
By Henry Saker-Clark, Press Association Deputy Business Editor
Press Association: Finance
source: PA
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