By Foo Yun Chee
BRUSSELS (Reuters) - CK Hutchison Holdings' (HK:0001) plan to combine its Italian subsidiary with a Vimpelcom (O:VIP) unit is expected to come under extensive EU scrutiny once a preliminary review ends, a person familiar with the matter said on Monday.
The companies however plan to offer concessions during this phase to allay the European Commission's concerns, the person said.
The Commission, which is now examining the deal in a preliminary review, last week flagged its concerns about possible price hikes because the merger will reduce the number of mobile network operators in Italy from four to three.
The EU competition authority's initial assessment is scheduled to end on March 11. A full-scale investigation could take up to five months. Commission spokesman Ricardo Cardoso declined to comment.
While the proposed combination of Hutchison's 3 Italia SpA and Vimpelcom's WIND Telecommunicazioni will create a player broadly equal to Telecom Italia (MI:TLIT) and Vodafone (L:VOD), it will also mean one fewer network operator in Italy and thus less competition.
European Competition Commissioner Margrethe Vestager has adopted a tougher line regarding consolidation in the sector after previous four-to-three telecoms deals resulted in higher phone bills for consumers but not significantly higher investments by the companies.