The Competition and Markets Authority (CMA) said it has referred the US$7.3b acquisition by US communications company Viasat Inc of rival Inmarsat for an in-depth Phase 2 investigation on concerns the merger could lead to a “substantial lessening of competition” in the UK.
Responding to the regulator’s decision, Viasat and Inmarsat said in a statement that they look forward to working with the CMA “to demonstrate how the planned combination of the companies will benefit customers by improving efficiencies, lowering costs, and increasing the availability of in-flight connectivity (IFC) around the world”.
Mark Dankberg, Viasat’s CEO and executive chairman, said: “We believe that a comprehensive Phase 2 analysis will support that our transaction will benefit the nascent, but rapidly growing IFC services available to airline passengers.”
The regulator said its initial investigation found it can be very difficult for airlines to switch satellite providers once they have installed network equipment. The merger of Viasat and Inmarsat could therefore “lock in a large part of the customer base” before rival suppliers emerge.
Combined, Intelsat and rival Panasonic represent more than 75% of the long-haul IFC market, the regulator stated.
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