European Commission Opens In-Depth Probe of Vodafone, Liberty Global Deal
December 11 2018 - 3:34PM
Dow Jones News
By Michael Dabaie
The European Commission said Tuesday it has opened an in-depth
investigation to assess Vodafone Group PLC's (VOD) proposed
acquisition of Liberty Global PLC's (LBTYA) businesses in the Czech
Republic, Germany, Hungary and Romania.
The commission said it is concerned the takeover may reduce
competition in Germany and the Czech Republic.
Liberty Global said in May it would sell its businesses in
Germany, Hungary, Romania and the Czech Republic to Vodafone, a
merger that would create one of the continent's biggest
telecommunications carriers.
The EC said in the Czech Republic, providers of standalone
telecommunications services could be shut out from retail markets
for mobile telecommunications services, Internet access services
and TV services because of the converged products the merged entity
could offer.
The commission said that, in Germany, Vodafone and Unitymedia,
Liberty's local subsidiary, currently compete against each other in
areas served by Unitymedia via cable on the retail fixed
telecommunications markets and on the retail TV markets. The
commission said it has concerns the transaction would eliminate
competition between the merging companies, reduce the number of
players and limit the merged entity's incentives to compete
effectively with the remaining operators. The EC also said the
proposed transaction could eliminate competition between the
merging companies for investment in next generation networks.
"This is a pan-European transaction, looking to create a
converged national challenger in four European markets. We are
confident that the transaction will be approved, as it will deliver
increased consumer choice, more competition and further investment
in high speed networks. We continue to expect final approval by
mid-2019 in line with our original announcement," Vodafone said in
a statement Tuesday.
"We always anticipated a second phase review given the size and
scope of the transaction, and it is clear that the EU is retaining
regulatory authority over the case," Liberty Global's Chief
Executive Mike Fries said in a statement.
The EC said at this stage it hasn't identified any specific
competition concerns for the Hungarian and Romanian markets.
The commission said it now has 90 working days, until May 2, to
make a decision.
European Commission statement:
http://europa.eu/rapid/press-release_IP-18-6772_en.htm
Write to Michael Dabaie at michael.dabaie@wsj.com
(END) Dow Jones Newswires
December 11, 2018 15:19 ET (20:19 GMT)
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