Telefonica has applied to the European Commission (EC) to clear its planned acquisition of KPN’s German mobile unit E-Plus for €8.55bn (US$11.6bn).
The EC received notification of the deal on 31 October and the phase I deadline is set for 6…
Telefonica has applied to the European Commission (EC) to clear its planned acquisition of KPN’s German mobile unit E-Plus for €8.55bn (US$11.6bn).
The EC received notification of the deal on 31 October and the phase I deadline is set for 6 December, the regulator announced on its website.
The case is widely expected to also undergo a 90 working day phase II investigation if it is not referred to German authorities.
Meanwhile, Germany’s Federal Cartel Office (FCO) is expected to put in a so-called referral request within the coming weeks.
Under EU law, regulators of member states can in some cases ask the EC to refer an investigation to them. Such a request has to be made during phase I of the EC investigation. Once formally submitted, Brussels will push back the phase 1 deadline by 10 working days to allow time to consider the request.
Approval of such a referral request is at the discretion of the EC. In a similar case last year, during the review of the sale of Orange Austria to Hutchison, the commission rejected a referral request by the Austrian antitrust authority.
At the end of August, the Spanish incumbent’s German unit Telefonica Deutschland (O2) upped its offer for E-Plus from €8.1bn to €8.55bn to secure the support of KPN’s largest shareholder America Movil (AMX). Under the new deal, Amsterdam-based KPN will get a 20.5% stake in the enlarged business, compared with the 17.6% originally agreed. Telefonica will hold 62.1% of the combined business and the remaining shares will be in free float. The €5bn cash component of the transaction remains unchanged.
KPN shareholders approved the deal in early October.
The EC review of the deal will be considered a key indicator of its willingness to allow consolidation within national mobile markets. If successful, Telefonica’s acquisition of E-Plus will reduce the number of mobile operators in Germany from four to three. At present, O2 and E-Plus compete with larger rivals Deutsche Telekom and Vodafone.
Separately, Telefonica is reported to be close to announcing a deal to sell its Czech unit to investment group PPF for about €2.5bn.