(Bloomberg) -- VimpelCom Ltd. and CK Hutchison Holdings Ltd., seeking to win regulatory approval of a planned merger of their Italian wireless carriers, received preliminary bids for some of their assets from Swisscom AG, Iliad SA and Digicel Group Ltd., according to people familiar with the matter.
The redundant wireless frequencies and about 5,000 towers would allow the winning bidder to create a new mobile-phone carrier in Italy, and potentially ease regulatory concerns about consumer choice and prices. The preliminary bids, negotiated but not binding, were presented to EU Competition Commissioner Margrethe Vestager, said the people, who asked not to be named because the negotiations are private. They declined to give additional details.
Sky Plc, the U.K.-based pay-TV service, has decided not to proceed with negotiations, according to the people.
By lining up buyers, Hutchison’s 3 Italia and VimpelCom’s Wind Telecomunicazioni SpA are trying to avoid a repeat of last month, when the EU blocked a U.K. deal also involving Hutchison. Vestager is said to be preparing formal objections to the 21.8 billion-euro ($24.7 billion) Italian deal, which would create the country’s largest wireless provider by customers. The commission will provide feedback to Hutchison and VimpelCom on the bids in a few days, though it won’t choose a bidder, the people said.
The European Commission declined to comment. It separately said Hutchison and VimpelCom formally submitted concessions on the deal on June 6.
Representatives for VimpelCom, Hutchison, Fastweb, Digicel and Sky declined to comment. A spokesman for French billionaire Xavier Niel’s Iliad had no immediate comment. Digicel, which operates in Jamaica and other Caribbean countries, is controlled by Irish billionaire Denis O’Brien.
Scrutiny from Vestager has forced European telecom operators to reassess their plans to consolidate. Without creating a new carrier, the Wind-3 Italia merger would reduce the number of mobile operators in Italy from four to three, the same number proposed in the blocked U.K. deal.
In March, the EU opened an in-depth probe into the Italy pact, citing concerns about potential price increases and reduced customer choice, similar to the reasons used in blocking the U.K. deal.
--With assistance from Alexandre Boksenbaum-Granier To contact the reporters on this story: Daniele Lepido in Milan at firstname.lastname@example.org, Aoife White in Brussels at email@example.com. To contact the editors responsible for this story: Anthony Palazzo at firstname.lastname@example.org, Anthony Aarons at email@example.com, Dan Liefgreen
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