BT-EE deal cleared by Competition and Markets Authority
BT Group's takeover of mobile phone network EE has been provisionally cleared by the Competition and Markets Authority (CMA).
The CMA said the £12.5bn deal, first announced in February, was "not expected to result in a substantial lessening of competition" in the UK".
BT shares were up 3% at midday in the wake of the CMA statement.
The deal is set to create a communications giant covering fixed-line phones, broadband, mobile and TV.
The takeover more than trebles BT's retail customers adding the 10 million it already had to EE's 24.5 million direct mobile subscribers.
John Wotton, chair of the CMA inquiry said: "Having considered all the evidence, the group does not provisionally believe that, in a dynamic and evolving sector, it is more likely than not that BT/EE will be able to use its position to damage competition or the interests of consumers."
The CMA said the two firms operated largely in separate areas "with BT strong in supplying fixed communications services (voice, broadband and pay TV), EE strong in supplying mobile communications services, and limited overlap between them in both categories of service".
BT chief executive Gavin Patterson said: "The combined BT and EE will be good for the UK, providing investment and ensuring consumers and businesses can benefit from further innovation in a highly competitive market".
However, BT may still be forced to break up its internet broadband business, Openreach, by communications watchdog Ofcom.
Rivals TalkTalk and Vodafone say that regulators should force BT to spin off Openreach to improve competition and provide a better service.
The CMA said in a statement: "We are aware of concerns voiced recently about Openreach and wider concerns are currently being considered by Ofcom in their review of the whole telecommunications market."
The Inquiry will now consider responses to its provisional report and publish a final report in January.