BRUSSELS--European Union antitrust authorities waved through
Telefónica SA's EUR8.6 billion ($11.7 billion) takeover of German
mobile operator E-Plus on Wednesday, after a lengthy review marked
by political pressure and an unprecedented revolt by national
regulators.
However the EU's antitrust authorities placed several conditions
on the merger approval, including ordering Telefónica to sell up to
30% of its network capacity to up to three rivals.
The merger is seen by investors as a test case for how EU
authorities will treat further deals in Europe's rapidly
consolidating telecoms sector. It will reduce the number of mobile
operators in Europe's most populous nation from four to three, a
move that EU antitrust chief Joaquín Almunia had previously warned
could lead to higher prices for consumers.
The European Commission, which acts as the region's central
antitrust authority, gave the green light after Telefónica made a
series of commitments aimed at supporting competition, including a
promise to sell up to 30% of the combined company's spectrum to up
to three so-called mobile virtual network operators. These
operators provide mobile phone services using another company's
network.
Those commitments ensure that the acquisition won't harm
consumers, EU antitrust chief Joaquín Almunia said in a
statement.
The EU's approval is likely to spark further consolidation in
the region's fragmented telecoms sector, where larger operators are
seeking to swallow smaller rivals to bolster falling revenues,
analysts said.
"This is a game-changer," said Mario Mariniello, an economist at
think tank Bruegel in Brussels.
The commission's blessing on the deal "sets a precedent" for how
EU authorities will look at similar mergers in other large
countries, Mr. Mariniello said. The commission had previously
approved four-to-three mobile-phone operator mergers in Austria
and, most recently, Ireland, but not in a big EU country.
The European Commission came under an unusual degree of
political pressure during the review, including calls from German
Chancellor Angela Merkel and likely future commission president
Jean-Claude Juncker for restrictions on European telecom mergers to
be eased.
Write to Tom Fairless at tom.fairless@wsj.com
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