By Mauro Orru

The European Commission said Thursday that it has referred a proposed merger of the U.K. operations of John Malone's Liberty Global PLC and Telefonica SA to the CMA, the country's competition authority.

The commission, the executive arm of the European Union, said evidence showed the proposed transaction posed a threat to competition in the U.K. telecommunications sector, where both companies are big market players.

Liberty Global and Spain's Telefonica agreed to combine their U.K. businesses in May, creating a telecom giant worth nearly $39 billion.

The deal entails a joint venture combining Liberty Global's Virgin Media and Telefonica's O2.

The commission said the referral would enable the CMA to deal with the case under U.K. national law.

The commission said, "the CMA claimed that it would be well placed to review the transaction in view of the upcoming expiry of the transition period," which comes to a close at the end of December.

Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94

(END) Dow Jones Newswires

11-19-20 0612ET