French incumbent Orange has agreed to offer concessions to gain EU approval of its planned €3.4bn (US$3.6bn) takeover of Spanish fixed-line operator Jazztel.
In a filing on its website, the EU competition authority said that Orange submitted…
French incumbent Orange has agreed to offer concessions to gain EU approval of its planned €3.4bn (US$3.6bn) takeover of Spanish fixed-line operator Jazztel.
In a filing on its website, the EU competition authority said that Orange submitted commitments on 6 March without elaborating further. A spokesperson for the Paris-based telco confirmed this but declined to provide additional details.
Last December, the European Commission (EC), which is due to decide on the deal by 30 April, launched an in-depth investigation into the proposed acquisition, as it feared that it could “lead to a significant loss of competitive pressure for fixed internet access services and fixed-mobile multiple play offers.”
It also added that the merger, which would reduce the number of local fixed-line players, could result in price increases for Spanish consumers.
In January, the EC rejected the Spanish competition authority’s request to assess the case under Spanish competition law, claiming that, due to its extensive experience in the telecommunications sector, it was better placed to deal with the transaction.
Orange, which currently provides both mobile and fixed services in Spain, first announced its intention to acquire Jazztel in September 2014, offering €13 per share in cash for 100% of Jazztel, which represented a 34% premium on the volume-weighted average closing price over the previous 30 trading days.
The move, which valued Madrid-listed Jazztel at 8.6 times its projected 2015 EBITDA, followed Vodafone’s €7.2bn (US$7.7bn) acquisition of Spanish cableco Ono earlier in the year.
Orange, which owns Spain’s third-largest mobile operator, estimates the combined entity will generate up to €1.3bn in global synergies, largely due to savings in operational expenditure and network investments.
