Watchdog to probe Nexfibre's £2bn acquisition of Netomnia

(Sharecast News) - The UK competition watchdog has launched an in-depth review of Nexfibre's proposed �2bn takeover of Netomnia, it was confirmed on Wednesday.

The joint venture between Virgin Media O2 parents Liberty Global and Telefonica and private equity firm InfraVia agreed to buy the Substantial Group-owned network earlier this year. At the time, Nexfibre said the deal would create an 8m home fibre network and challenge BT's Openreach, the UK's biggest fibre and broadband business.

However, concerns were raised that the overlap between VMO2's existing broadband network and Netomnia's would in fact reduce overall competition.

Announcing the probe, the Competition and Markets Authority said both Nexfibre and Substantial had requested that the in-depth review be fast-tracked, which it had agreed to. Fast-tracking reviews skip preliminary investigations.

Nexfibre chief executive Rajiv Datta said: "We requested a fast-track to Phase 2 to get to the right answer faster - ensuring due process while recognising urgency."

The regulator will now assess whether the merger will result in a "substantial lessening" of competition within the UK, and will report its findings by mid-December.

Rival CityFibre - which was also a suitor for Netomnia before losing out to Nexfibre - welcomed the review. Chief executive Simon Holden said the deal 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."