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British watchdog to investigate proposed Cellnex acquisition of CK Hutchison's towers

News

The Brits aren't the only ones feeling disquiet about the sudden rise of towercos – aka neutral hosts – in Europe.

The UK's Competition and Markets Authority (CMA) confirmed it has referred the proposed acquisition of the passive infrastructure assets of CK Hutchison Holdings Limited and its subsidiaries in the UK by Cellnex UK Limited for a full investigation.

Last November the Barcelona-based towersco, Cellnex Telecom, agreed to acquire 24,600 towers from CK Hutchison in the UK, Italy, Ireland, Austria, Sweden and Denmark.

Terms and conditions

Under the terms of the €10 billion deal, Cellnex was bound to roll out 5,250 new sites over the next eight years at an estimated cost of €1.4 billion, and Cellnex and CK Hutchison were to sign long-term service contracts for an initial period of 15 years, which could be extended for a further 15 years.

The CMA said it would investigate the proposed deal, "on the basis that…it is or may be the case that this merger has resulted or may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom".

Cellnex says it has about 128,000 sites.

When in Rome…

The UK is not the first market to be wary of the growing power of a handful of towercos, and Cellnex in particular. In April, Italy's regulator probed the Italian element of the deal, although it was allowed to go through earlier this month.

Cellnex's rise has been so fast, it has caught regulators on the back foot, but there are justified concerns it will have an unhealthily dominant position, and the UK might just put a spoke in its wheels and wake up some other regulators to the dangers.

There are also fears about American Tower's European ambitions. It's surely only a matter of time before the EU's Competition Commission wades in, but it's already late to that party.