(Adds Hutchison comments, Commission's 'no comment')
By Foo Yun Chee
BRUSSELS Oct 23 Hutchison Whampoa's
$1 billion bid for Telefonica's Irish unit is likely to face a
lengthy EU antitrust investigation unless Hutchison offers
concessions to allay competition concerns, two people familiar
with the matter said on Wednesday.
Hong Kong-based Hutchison Whampoa, controlled by Asia's
richest man, Li Ka Shing, announced the 780-million-euro ($1.07
billion) offer for Telefonica's 02 Ireland unit in June as part
of a drive to expand its presence in Europe.
The acquisition would quadruple the market share of
Hutchison's subsidiary, 3 Ireland, to 37.5 percent, behind
market leader Vodafone.
The European Commission, which is now conducting a
preliminary review of the deal, expressed concerns to Hutchison
officials at a "state-of-play" meeting on Tuesday, the sources
said, declining to provide details.
The biggest regulatory worry is likely to be a reduction of
competition in Ireland, as the deal will cut the number of
mobile phone operators from four to three - an issue Hutchison
ran into during its takeover of Orange Austria last year.
Hutchison said such meetings were part of the regulatory
process. "We will be waiting to see what the Commission will say
at the end of the Phase 1 review," a Hutchison spokesman said.
Hutchison has until Nov. 6 to offer concessions. Failure to
do so will trigger an in-depth investigation that could take up
to five months.
Regulators typically ask telecoms operators to relinquish
some frequencies or make it easier for rivals to gain access to
their networks to ease competition concerns.
The Commission's spokesman for competition policy, Antoine
Colombani, declined to comment.
($1 = 0.7260 euros)
(Reporting by Foo Yun Chee; editing by Barbara Lewis and Kevin