Weil advised Virgin Media O2 on the €17.5 billion joint venture between Vodafone and Three UK, which was cleared with remedies today by the UK CMA following a complex Phase 2 investigation. 

The deal represents a rare instance of a successful four-to-three merger in the telecoms industry, and was exceptionally cleared subject to a novel investment remedy, entailing an undertaking by Vodafone and Three UK to roll out their joint network plan, alongside some time-limited retail and wholesale protections.  

In the context of the deal, Virgin Media O2 agreed to extend and enhance its existing Beacon mobile network sharing agreement with Vodafone for more than a decade, bolstering quality mobile coverage across the country and delivering improved services for customers (see link). Under the agreement Virgin Media O2 will purchase spectrum from the merged entity, increasing their current holding. 

The CMA exceptionally recognized that the Beacon arrangements will provide a notable and rapid increase in network quality for Virgin Media O2’s wholesale and retail customers which would further increase network quality competition, as well as an increase in capacity (and lower future costs of capacity) for Virgin Media O2, making it a stronger competitor.

Lead partner, Jenine Hulsmann, said “Virgin Media O2 and the merging parties engaged constructively to address concerns at an early stage in the process.” She also noted that “The CMA has taken a flexible and innovative approach to remedy design in order to promote investment in critical mobile communications infrastructure. Other competition agencies around the world will carefully the study the CMA’s ground-breaking decision in this case.”

The Weil team, working closely with the VMO2 competition team, was led by London Antitrust partner Jenine Hulsmann, and included counsel Chris Chapman and Annagiulia Zanazzo and associates Patrick May and Jenny Patroclou.