The European Commission has approved Oi’s €7.4bn (US$8.3bn) sale of PT Portugal to Altice, subject to the divestment of its Portuguese assets.
In a statement on Monday, the EU regulator said telecoms holding Altice must offload cableco Cabovisao and…
The European Commission has approved Oi’s €7.4bn (US$8.3bn) sale of PT Portugal to Altice, subject to the divestment of its Portuguese assets.
In a statement on Monday, the EU regulator said telecoms holding Altice must offload cableco Cabovisao and fixed-line player Oni to gain clearance.
“My wish is to ensure that the merger will not lead to higher prices and less competition for Portuguese consumers. The commitments offered by the parties address this concern,” EU antitrust chief Margrethe Vestager said.
The commission had concerns that the merger would lead to reduced competition in segments including the wholesale markets for leased lines and call transit, fixed voice, fixed internet access and residential pay-TV, as well as telecoms services for business customers, increasing consumer prices.
The EC also said that it had rejected a request from the Portuguese competition authority to review the acquisition, arguing that it had extensive experience in assessing telecoms cases and wanted to ensure the consistent application of merger control rules.
Vodafone in early stage talks to buy Cabovisao
Last month, Armando Pereira, the co-founder of Altice’s Portuguese business, said in a video interview that a number of potential suitors had expressed an interest in acquiring Cabovisao.
The FT today reported that the company was in early-stage talks to sell the asset to Vodafone Portugal, whose CEO Mario Vaz was recently quoted voicing possible interest.
Local operator Nos, which is controlled by Angolan billionaire Isabel dos Santos, would also be a potential suitor, along with PE funds, a person familiar with the situation told TelecomFinance, adding that the sale of Cabovisao would be “straightforward”.
Vodafone and Nos declined to comment.
The person said that it would make more sense for Nos to acquire Cabovisao since both operators use the same technologies, therefore leading to greater synergies. However, he warned that Nos could face regulatory hurdles since it would become a dominant player.
A banker said the Nos has already overbuilt cable.
Oni, for its part, might be attractive to an overseas B2B player such as the UK’s Colt, the banker said.
As of Q3 14, PT held 54.8% of Portugal’s fixed telephony market, followed by Nos (30.5%), Vodafone (8.8%) and Cabovisao (4.7%).
Impact on Oi
The regulatory approval is good news for highly leveraged Brazilian operator Oi, which is next expected to place a bid on local rival TIM Brasil, itself linked to buyer interest in Oi.
Oi, which inherited PT Portugal as part of an ill-fated merger, has repeatedly said that it wanted to lead the consolidation process in Brazil.
However, the telco, which is struggling to reduce its R$46bn (US$15bn) debt burden, would not have the financial capabilities to initiate a takeover, said a local analyst.
Having so far failed to reach an agreement for the sale of its African assets, Oi holds a domestic fixed telephony concession due to expire in 2025.
According to the analyst, the company’s high debt levels coupled with this regulatory uncertainty have so far put off potential investors, including TIM.
