TEF Telefonica SA

BRUSSELS—The European Commission is set to torpedo CK Hutchison Holdings Ltd.'s planned $14 billion takeover of Telefonica SA's British cellphone operator O2, two people familiar with the matter said.

The EU's 28 commissioners are scheduled to approve the decision by the bloc's antitrust watchdog on Wednesday, the people said, after the companies failed to assuage the regulator's concerns the deal would lead to higher prices and less choice for U.K. consumers.

European Union antitrust chief Margrethe Vestager has taken a tough stance against telecoms mergers in the region, particularly in cases where deals reduce the number of mobile-telecom operators in a given country from four to three, as would be the case in the U.K. deal.

The commission's decision in the U.K. deal reinforces the EU's course for future telecom merger reviews, including its probe into Hutchison's plans in Italy to merge its 3 Italia business with Russian telecom firm VimpelCom Ltd.'s Wind Group—another so-called "four-to-three" merger.

In the U.K., the purchase of Telefonica's British mobile operator by Hong Kong tycoon Li Ka-shing's Hutchison would have combined O2, the country's second-largest mobile operator and Three U.K, Britain's fourth-largest operator. The acquisition, announced in 2015, would have more than tripled Three's U.K. subscribers to 34 million and would create the country's biggest mobile operator.

Write to Natalia Drozdiak at natalia.drozdiak@wsj.com and Valentina Pop at valentina.pop@wsj.com

(END) Dow Jones Newswires

May 03, 2016 06:55 ET (10:55 GMT)

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