Vodafone warned £15bn takeover could be blocked

A MEGA-merger between Vodafone and Three is at risk of falling apart after the competition watchdog launched an in-depth investigation into the deal.

The Competition and Markets Authority (CMA) will probe the £15bn tie-up over concerns it will push up prices for customers.

The decision pits Vodafone boss Margherita Della Valle against the CMA’s managing director Sarah Cardell.

Last week, the regulator said the merger would reduce rivalry in the sector. The companies were given five days to respond to the findings of the first stage of the investigation. But they did not offer solutions, which has triggered the second phase of the probe.

The CMA has the power to block mergers that would harm customers.

Three and Vodafone yesterday said the phase two investigation was ‘an expected next step in the process’. But Karen Egan, head of telecoms at Enders Analysis, said there was ‘a considerable risk’ the deal will be blocked. single provider, creating the biggest

Della Valle became Vodafone’s UK mobile phone network. first female chief executive early But the CMA warned last week last year. She took over after the merger may reduce networks’ Nick Read, who presided over a rivalry to win customers, removing big slump in the FTSE 100 firm’s price competition and the share price, was ousted in 2022. incentive to improve services.

The Italian businesswoman, In a joint statement, Vodafone who has worked for Vodafone for UK and Three UK said: ‘This nearly 30 years, was tasked with was an expected next step in the turning the telecoms giant’s fortunes process and is in line with the around. Under the plan, timeframe for completion.’ the proposed tie-up would bring Last week Julie Bon, CMA deputy together 28m customers under a chief economic advisor, said:

‘Whilst Vodafone and Three have made a number of claims about how their deal is good for competition and investment, the CMA has not seen sufficient evidence to date to back these claims.

‘Our initial assessment of this deal has identified concerns which could lead to higher prices for customers.

‘These warrant an in- depth investigation unless Vodafone and Three can come forward with solutions.’ The companies have insisted a deal will benefit customers as it will allow them to invest £11bn in technology. They said they are unable to compete with market leaders EE and O2.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: ‘The outcome from this won’t be known until mid-September, and there will be little to move Vodafone’s share price between now and then as this is the main sentiment driver.’

Vodafone shares fell 1.5pc.