UK watchdog to review Liberty Global, Telefonica deal - source

By Foo Yun Chee

BRUSSELS (Reuters) - UK competition watchdog CMA is set to take over the review of Liberty Global <LBTYA.O> and Telefonica's <TEF.MC> plan to merge their British businesses, with EU antitrust regulators ceding the case to them, according to a person familiar with the matter.

The U.S. cable operator and Spanish telecoms provider want to better compete with market leader BT <BT.L> with the $38 billion (28.83 billion pounds) deal combining Virgin Media and O2.

They sought European Commission approval on Sept. 30 while CMA requested to take over the review on Oct. 8 because of the deal's impact in Britain and after Brexit.

The EU competition enforcer, which has a Nov. 19 deadline for its preliminary scrutiny, declined to comment. It has, in the past, preferred to examine telecom cases rather than cede them to national watchdogs to maintain a harmonised policy across the 27-country bloc.

"We remain in constructive dialogue with all relevant stakeholders at the EU and CMA and continue to work to the timeline of completing the deal mid-next year," the companies said in a joint statement.

(Reporting by Foo Yun Chee; editing by Bernadette Baum and Jason Neely)