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The merger of Li Ka-shing's Three UK with British telecommunications operator Vodafone is under scrutiny by the UK** authorities. The central issue of this incident seems to be "**
First of all, we need to understand that any country will be very cautious when facing foreign investment involving critical infrastructure and important industries, such as telecommunications. This is because these industries may involve sensitive issues such as public order and public interest. As a result, such transactions are often subject to strict scrutiny and regulation.
For Li Ka-shing, his investment in the UK has not been without its challenges. While his investments have helped the UK's economy, it has also raised some concerns about foreign control over critical infrastructure. This may be one reason why the UK is reviewing this merger.
Although Li Ka-shing invested a lot of money in the United Kingdom and even received a knighthood from the Queen, this did not stop the British ** from scrutinizing the deal. This somewhat weakens the image of the so-called "most open market in the world", making it look more like an international joke.
In the context of globalization, many countries are trying to attract foreign investment in order to boost their economies. However, when it comes to critical infrastructure and important industries, many countries can become very cautious and may even intervene. This is not to say that they do not welcome foreign investment, but they need to find a balance between attracting investment and protecting national interests.
Since Three UK is part of Li Ka-shing's Long River Group, which is headquartered in Hong Kong, this means that if the merger goes through, the UK's largest telecom operator will effectively become a "Chinese company". This has sparked concerns in the UK that Chinese investors may have access to sensitive information in the UK.
In 2022, the UK specifically introduced the Investments Act, which allows the UK to review foreign capital investments and mergers and acquisitions involving "sensitive industries" and block the relevant transactions on the grounds of "**". The merger of Vodafone and Three UK touched on the provisions of this law, and therefore triggered scrutiny in the UK.
The UK** also proposed an "antitrust investigation" as the basis for the review. However, the author considers both of these reasons to be somewhat far-fetched.
First of all, on the grounds of the "anti-monopoly investigation", the UK** claims that the competition pattern of the four telecommunications companies is "balanced", and the merger becomes three that is not conducive to market competition, which may lead to an increase in the price of ** fees. But the author mentions that back in 2016, Three UK tried to merge with O2, the UK's second-largest operator, which was blocked by the European Commission on similar grounds. However, under the competition of four telecommunications companies, the construction of telecommunications infrastructure in the UK has almost come to a standstill. As a result, the EU lifted the original ban on mergers and acquisitions in 2020. This shows that the UK**'s "anti-monopoly" considerations do not appear to be consistent, sometimes based on market competition considerations, and sometimes on other factors.
Second, the merger of the second and fourth largest operators was not seen as a problem at the beginning, but now the merger of the third and fourth largest operators is suspected of "monopoly", which seems to be a bit bullying. This change makes the UK**'s reasons for review appear unreasonable and inconsistent.
In general, to review whether an M&A case is suspected of monopoly, it is necessary to analyze the market structure, competition and market influence after the merger in detail. If the UK** review is based on adequate market analysis and the principle of reasonable competition, then this reason may be reasonable. But if the review lacks sufficient evidence or is based on inconsistent criteria, then it may be seen as far-fetched.
Li Ka-shing has been described as believing in the commitment to the opening of the UK market and has made a massive investment in the UK. As investment matures and money is invested, the UK** has begun to adopt a strategy similar to that of the "three brothers next door", restricting the free flow of capital and the normal operation of businesses by increasing censorship and creating barriers.
This strategy can be called "pig slaughter", which means taking advantage of investors' trust and funds, and when the investment is mature or the capital is fully invested, it restricts the outflow of funds through various means to achieve the purpose of controlling or possessing the investment.
The final conclusion is that Li Ka-shing may face difficulties in withdrawing from the UK, as his investment has exceeded 310 billion yuan, and the UK** has already begun to take steps to limit his capital and business activities.