Joint Venture Between Hutchison 3G Italy and WIND

In September 2016, the European Commission conditionally cleared the joint venture between the Italian mobile telecoms operators Hutchison 3G Italy and Wind (a subsidiary of Vimpelcom). The transaction combined the fourth and third largest Italian mobile network operators and created the largest mobile network operator in Italy. To address the European Commission’s remaining concerns, the parties committed to divest sufficient assets to allow a fourth mobile network operator to enter the Italian market. Compass Lexecon advised both operators during the European Commission’s in-depth (Phase II) investigation.

Compass Lexecon experts submitted several reports assessing, among other things, the financial rationale of the transaction from each party’s perspective, the relevance of network sharing agreements for counterfactual analysis, and the likely effects of the merger on consumer welfare. The latter assessment was supported by a merger simulation model based on a discrete choice customer survey, capable of taking into account not only the potential price effects resulting from the elimination of competition between the parties but also the welfare-enhancing network quality effects (increased 4G coverage and download speeds) brought about by the transaction.

Compass Lexecon worked with the parties’ legal advisers from Freshfields Bruckhaus Deringer LLP (partners Thomas Wessely and Winfred Knibbeler) and Allen & Overy LLP (partners Antonio Bavasso and Kees Schillemans). The Compass Lexecon team included Jorge Padilla, Thilo Klein, Miguel de la Mano, Alejandro Requejo, Jérémiah Juts, Patricia Lorenzo, Valérie Meunier, Gianmarco Calanchi, Abbas Mohsin, Bernardo Sarmento and Thomas Bowman.