(Adds comments from Liberty Global and Telefonica)

By Ian Walker

The U.K. Competition and Markets Authority said Friday that it has agreed to fast track its investigation into the merger of the U.K. operations of John Malone's Liberty Global PLC and Telefonica SA.

The regulator said it made the decision after the companies requested it move quickly to an in-depth Phase 2 investigation of the combination of Liberty Global's Virgin Media and Telefonica's O2 on Nov. 10.

The CMA said it is concerned the merger will lead to increased prices or reduced service for customers.

It said the investigation will be overseen by an inquiry group chosen from independent CMA panel members, adding that interested parties will be given the opportunity to present their views.

"Liberty Global and Telefonica are pleased that the CMA has agreed to the parties' request to start a 'fast-track' to Phase 2 process in the U.K," a Liberty Global and Telefonica spokesperson said in an emailed statement.

"We look forward to working constructively with the CMA to achieve a positive outcome. We continue to expect the transaction to close around the middle of next year," the spokesperson added.

The companies agreed to the merger on May 7 in a deal that would create a telecom giant worth nearly $39 billion.

Write to Ian Walker at ian.walker@wsj.com

(END) Dow Jones Newswires

12-11-20 0445ET