British telecommunications dragged the FTSE 100 index lower on Friday, following the news of a blocked merger.
Vodafone and BT Group's share prices both tumbled around 1.6 per cent as the European Union’s antitrust authority moved to block a deal between Scandinavian telecoms companies TeliaSonera and Telenor.
The merger would have created Denmark’s biggest provider, but the deal fell apart as the European Commission raised concerns about the impact of reducing the number of major mobile operators in the country from four to three.
Robert Andersson, TeliaSonera’s executive vice president and head of region Europe, said:
In our view, creating a market player with the scale and ability to compete and invest would ensure that customers and businesses would benefit from better quality, speed and coverage.
Telecoms companies have been on an M&A spree this year, with Three buying Telefonica’s O2 and BT’s recent acquisition of EE. But regulators have previously begun raising flags about this causing “significant” competition concerns.
The European Commission’s move to block the Scandinavian merger puts a damper on the industry’s hopes to offset drooping sales with further consolidation.
The FTSE 100 index was down 0.25 per cent to 6,140 at pixel time.