EU approves 21.8 bln euro Hutchison, VimpelCom Italian deal

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By Foo Yun Chee

BRUSSELS, Sept 1 (Reuters) - CK Hutchison Holdings won EU approval on Thursday for the planned merger of its Italian mobile unit with that of VimpelCom (Frankfurt: 35V.F - news) , after pledging to help French maverick Iliad (LSE: 0MGY.L - news) enter the Italian market.

The EU green light will come as a relief to the telecoms industry after a regulatory veto in May on Hutchison (HKSE: 0013-OL.HK - news) 's bid to combine its Three UK subsidiary with Telefonica (LSE: 826858.L - news) 's O2 UK because it had failed to allay competition concerns.

The telecoms industry has seen a spate of mergers in recent years as companies bulk up to invest in expensive high-speed networks.

The EU antitrust enforcer said concessions offered by Hutchison in the Italian deal would ensure a fourth telecoms operator in Italy.

"I'm particularly happy about the solution because it structurally ... solves all the concerns we have. It allows Iliad to come in, in a transition period, while they start to invest," European Competition Commissioner Margrethe Vestager told Reuters in an interview.

"So you have a merger, you have a new entrant, and you have investment in networks that everyone wants," she said.

Hutchison will sell some radio frequencies and will also share or transfer several thousand mobile base station sites to Iliad. A transitional agreement will give Iliad access to the merged company's 2G, 3G, 4G and other new technologies.

Founded by French entrepreneur Xavier Niel, Iliad sparked a price war in the French mobile market with its entry four years ago under its TV, telecoms and internet services brand Free.

The 21.8 billion euro ($24.3 billion) deal combining Hutchison's 3 Italia with VimpelCom's Wind will be better able to compete with rivals Telecom Italia (Other OTC: TIAJF - news) and Vodafone Italia, part of Vodafone Group (NasdaqGS: VOD - news) . ($1 = 0.8970 euros) (Editing by Philip Blenkinsop and David Holmes)